Uber announced today it is merging its China operations with homegrown rival Didi Chuxing.
The news ends an expensive price war with China’s leading vehicle and taxi hailing company, freeing Uber up to focus on other markets and possibly an initial public offering.
According to Uber CEO Travis Kalanik, two years after entering the Chinese market Uber is now doing more than 150 million trips per month. Unfortunately Uber has been losing $1 billion per year building trying to build market share in China.
Kalanik wrote today, “I have no doubt that Uber China and Didi Chuxing will be stronger together. That’s why I’m so excited about our future, both in China—a country which has been incredibly open to innovation in our industry—and the rest of the world, where ridesharing is increasingly becoming a credible alternative to car ownership.”
Uber has said that it’s profitable in the U.S. and Canada, but losses in developing markets have undercut that hard-fought progress.
As part of the arrangement, Didi will reportedly invest $1 billion in Uber’s global company.