BEIJING—Ride-sharing giant Uber is to give up its ferocious battle for market share in China by merging its operations with local rival Didi Chuxing, reports said Monday.
The deal will give Uber a 20 percent share in the combined firm, which will be valued at $35 billion, Bloomberg News reported.
Both companies have spent billions of dollars on subsidies for drivers and passengers, as well as trading vitriolic accusations, as they fought for dominance in the potentially lucrative market.
As reported, the structure of the agreement leaves Didi Chuxing in unquestioned control of the sector in the world’s second-largest economy.
By “shedding its massive losses” in the country, Uber will help clear its way to a future flotation, Bloomberg said.
The Wall Street Journal said a formal announcement could come as early as Monday.
A blog post circulating on Chinese social media purportedly written by Uber CEO Travis Kalanick said: “I’ve learned that being successful is about listening to your head as well as following your heart.”
Uber China had “exceeded even my wildest dreams” as “most US technology companies struggle to crack the code there,” he said.
But both firms were “investing billions of dollars in China and both companies have yet to turn a profit there”, he added.
“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.”
China-based spokesmen for both Uber China and Didi Chuxing did not immediately respond to requests for comment by AFP.
The reports come days after Chinese authorities announced new rules governing ridesharing, making clear for the first time that they may operate legally in the country.
The new rules will also forbid ridesharing platforms to operate below cost, possibly restricting their scope to offer subsidies.