The global ridesharing wars took a dramatic turn in December when a handful of companies not named Uber joined forces to try and tame CEO Travis Kalanick's quest for world domination.
Headlining the group were Lyft in the U.S. and Didi Chuxing (then called Didi Kuaidi) in China. Earlier in the year, Didi invested $100 million in Lyft.
John Zimmer, Lyft's president and co-founder, said the consortium, which also included Grab Taxi in Southeast Asia and Ola in India, would provide "the world's best coverage while building upon our shared vision of reconnecting communities through better transportation."
So much for that rosy view.
On Monday, eight months after the alliance was formed, Didi teamed up with the enemy.
Didi agreed to acquire Uber's China unit in a deal that values the company at $35 billion, according to a person familiar with the matter, giving Uber and its shareholders a 20 percent stake in the combined entity. Kalanick will join Didi's board, and Didi founder and Chairman Cheng Wei will pick up an Uber board seat.
The merger presents yet another challenge to Lyft in its battle against the much larger Uber. With a $15 billion cash stockpile and a $68 billion valuation, Uber has been executing a growth campaign unlike any other, relentlessly recruiting drivers with sweet incentives and subsidizing rides to counter price drops by rivals.
By any standard other than Uber, Lyft has been a screaming success, reaching a $5.5 billion valuation in just four years and operating in over 200 U.S. cities and nine in Asia. Uber, however, is all over the world and even spent $2 billion to build its operation in 60 Chinese cities.