---
title: "Uber Sells Chinese Operations to Rival Didi Chuxing"
description: "Move strengthens both companies while tying them together."
date: "2016-08-01"
modified: "2016-08-01"
authors:
  - name: "Will Sabel Courtney"
    job_title: "Contributor"
    link: "https://www.thedrive.com/authors/will-sabel-courtney"
url: "https://www.thedrive.com/news/4656/uber-sells-chinese-operations-to-rival-didi-chuxing"
categories:
  - "Car Tech"
  - "News"
tags:
  - "China"
  - "didi chuxing"
  - "Uber"
---

# Uber Sells Chinese Operations to Rival Didi Chuxing

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*\<em\>www.thedrive.com</em>*

In a seismic shift in the Asian ride-hailing market, [Uber is selling its Chinese operations to rival Didi Chuxing](<https://www.wsj.com/articles/china-s-didi-chuxing-to-acquire-rival-uber-s-chinese-operations-1470024403>), ending a long, fiscally-bloody struggle for dominance in the nation's rapidly-growing market for 21st Century mobility solutions.

[The deal, announced Monday, provides Uber](<https://www.nytimes.com/2016/08/02/business/dealbook/china-uber-didi-chuxing.html?_r=0>) and its investors with a 20 percent stake in Didi Chuxing, in exchange for turning over its Chinese operations to the local ride-hailing service. The deal will make Uber the largest single shareholder in [Didi, which also counts Apple](<https://www.thedrive.com/news/3464/apple-just-bought-1-billion-of-chinas-uber-competitor>) and Yahoo! partner Alibaba amongst its owners. Didi will also invest $1 billion in Uber's global operations as part of the transaction.

The Chinese market has been a thorn in Uber's side ever since the ride-hailing company began operating in the country in 2014. By CEO Travis Kalanick's own admission, [Uber had been losing more than $1 billion a year](<https://www.thedrive.com/news/2294/ubers-losing-1-billion-a-year-in-china>) in China, largely due to its cutthroat competition with Didi Chuxing. According to reports, [Uber's investors had been pushing the company](<https://www.nytimes.com/2016/08/02/business/dealbook/china-uber-didi-chuxing.html?_r=0>) to cut a deal with its Chinese arch-foe in order to staunch the bleeding.

Indeed, a prepared statement released by Kalanick seemed to touch directly on those concerns. Providing service in China, it read, "is only possible with profitability.” But as the CEO pointed out in a blog post discussing the deal, [neither Uber nor Didi have yet turned a profit](<https://newsroom.uber.com/uber-china-didi/>) in China.

The deal comes only a week after news broke that [Chinese regulators were moving to officially legalize ride-hailing services](<https://www.thedrive.com/news/4614/uber-will-soon-be-legal-in-china>) such as Didi and Uber. Previously, such companies had been operating in a legal gray area. The news rules will no longer allow ride-hailing companies to operate below cost, which has been [one of Uber's main strategies](<https://www.thedrive.com/news/3689/uber-is-testing-cash-payments-and-image-based-navigation-in-africa>) when it comes to carving out a niche in developing markets.

The pact brings Didi Chuxing's total valuation to around $36 billion. The company was appraised at $28 billion during its last round of fundraising, while Uber's Chinese operations were valued at approximately $8 billion.

Interestingly enough, the Uber–Didi deal would appear to have one unusual side effect. Unless the new deal were to invalidate [the existing deal between Didi and Lyft](<https://blog.lyft.com/posts/lyft-didi>) that allows consumers of one app to use the other, the Chinese deal means Uber and its chief American rival have become, in effect, related by marriage.

## Author
Will is the former managing editor of *RIDES Magazine* and the former online editor for *0-60 Magazine*. He has worked for *Time Out New York* and *Rolling Stone*, and was the creator of *College Cars Online*, the first automotive blog specifically targeted at college students and young professionals.

### Author social links  
[Instagram](<https://instagram.com/willsabelcourtney>)  
[Twitter](<https://twitter.com/willscourtney>)