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| Uber sells Chinese business to Didi Chuxing | Uber sells Chinese business to Didi Chuxing |
| (35 minutes later) | |
| Taxi-booking app Uber has agreed to sell its business in China to rival Didi Chuxing. | Taxi-booking app Uber has agreed to sell its business in China to rival Didi Chuxing. |
| The two firms have been fierce competitors, but Didi Chuxing dominates the Chinese market with an 87% share. | |
| Uber China launched in 2014 but has failed to make any profit so far. | |
| Cheng Wei, founder and chief executive of Didi Chuxing, said the two companies had "learned a great deal from each other over the past two years in China's burgeoning new economy". | Cheng Wei, founder and chief executive of Didi Chuxing, said the two companies had "learned a great deal from each other over the past two years in China's burgeoning new economy". |
| He added that the deal would "set the mobile transportation industry on a healthier, more sustainable path of growth at a higher level". | |
| As part of the deal, Mr Cheng will join the board of Uber, while Uber chief executive Travis Kalanick will join Didi's board. | |
| Uber's China business will retain its separate branding and hold a 20% stake in the combined company, while US-based Uber Technologies will hold 5.9% of voting rights in the group. | |
| Didi Chuxing is backed by Chinese internet giants Tencent and Alibaba, and has also invested in Uber's rival US taxi-booking service Lyft. | |
| Big losses | Big losses |
| Uber has been struggling to break into the Chinese market despite having Chinese search engine Baidu as an investor. | Uber has been struggling to break into the Chinese market despite having Chinese search engine Baidu as an investor. |
| In February, the company admitted it was losing more than $1bn a year in China, spending huge sums to subsidise discounted fares. | In February, the company admitted it was losing more than $1bn a year in China, spending huge sums to subsidise discounted fares. |
| "Funding their China dreams was becoming too expensive for Uber," Duncan Clark, chairman of Beijing-based consultancy BDA, told the BBC. | |
| "Many saw it as an obstacle to their own IPO (Initial Public Offering)." | |
| Uber chief Travis Kalanick said that "as an entrepreneur, I've learned that being successful is about listening to your head as well as following your heart". | |
| "Getting to profitability is the only way to build a sustainable business that can best serve Chinese riders, drivers and cities over the long term." | "Getting to profitability is the only way to build a sustainable business that can best serve Chinese riders, drivers and cities over the long term." |
| The fierce rivalry had led both companies to heavily subsidise their journeys. The merger is likely to see fewer such subsidies. | The fierce rivalry had led both companies to heavily subsidise their journeys. The merger is likely to see fewer such subsidies. |
| "One thing to watch carefully is how quickly consumers feel the impact as subsidies are withdrawn," Mr Clark added. | |
| Analysis: Karishma Vaswani, Asia business correspondent | Analysis: Karishma Vaswani, Asia business correspondent |
| If you can't beat them, join them - that may be what Uber's ultra ambitious Travis Kalanick was thinking. This deal may be Uber's best available option on the table. | If you can't beat them, join them - that may be what Uber's ultra ambitious Travis Kalanick was thinking. This deal may be Uber's best available option on the table. |
| Uber put up a good fight, there's no doubt about it. And it may not all be bad news. | Uber put up a good fight, there's no doubt about it. And it may not all be bad news. |
| If the departure from the Chinese market means a sizeable stake in the biggest ride-sharing player in the world's second largest economy, which currently has a potential customer base of some 750 million people, and that's only going to grow - then that's not too shabby. | If the departure from the Chinese market means a sizeable stake in the biggest ride-sharing player in the world's second largest economy, which currently has a potential customer base of some 750 million people, and that's only going to grow - then that's not too shabby. |
| Recognising this was one fight he wasn't going to win, may well turn out to be a sign of Mr Kalanick's maturity and business acumen in the future. | Recognising this was one fight he wasn't going to win, may well turn out to be a sign of Mr Kalanick's maturity and business acumen in the future. |
| Read Karishma's blog in full | Read Karishma's blog in full |
| Didi Chuxing in brief: | Didi Chuxing in brief: |
| New rules | New rules |
| The deal with Didi Chuxing comes just days after China agreed to provide a legal framework for taxi-ordering apps. | The deal with Didi Chuxing comes just days after China agreed to provide a legal framework for taxi-ordering apps. |
| Both Uber and Didi have welcomed the decision, having previously operated in a legal grey area in the country. | Both Uber and Didi have welcomed the decision, having previously operated in a legal grey area in the country. |
| While the apps are widely popular, they have undermined business for normal taxis and have been met with protests by cab drivers. | While the apps are widely popular, they have undermined business for normal taxis and have been met with protests by cab drivers. |
| The new rules will take effect on 1 November and will, among other things, forbid such platforms to operate below cost. | The new rules will take effect on 1 November and will, among other things, forbid such platforms to operate below cost. |