Uber is reversing out of a dead end in China. The San Francisco-based ride-hailing app is handing its China business to local rival Didi Chuxing. In exchange, Uber and its investors get 20 percent of the merged entity, which is valued by media reports at $35 billion. It is a humiliating reversal after a high-profile battle against the larger Didi. The combined group can now cut back on subsidies and focus on profit.
This is a sudden retreat. Just eight months ago, Uber boss Travis Kalanick said the company was "in China for the long-term." The China unit had just raised more than $1.2 billion at a valuation of more than $8 billion, including new money.
It also adds to the long list of U.S. giants who are either restricted in China — like Facebook and Google — or who have been sent packing by local rivals — like eBay, or Wal-Mart, which recently backed out of online groceries.