Uber and Didi Call a Truce In China With a $35 Billion Deal (recode.net)

Kara Swisher, reporting for Recode: Uber, which has been spending hugely in China over the last two years, has folded, striking a deal in which it will merge its Chinese operations with its main rival there, Didi Chuxing. Under terms of the deal, Uber China, the ride-hailing company's Chinese subsidiary, will be part of a larger Didi company valued at $35 billion. Uber gets a 20 percent stake in that -- Didi's previous valuation was $28 billion. That's a $7 billion value for upward of $2 billion that Uber has frittered away, um, spent there. In turn, Didi will invest in Uber at a valuation of almost $70 billion. That was about the value of Uber's last round. Now, everyone owns everyone everywhere.

Comments

Frittered Away?

[Diss Champ]

If they managed to get a stake worth $7 billion from spending $2 billion, that $2 billion is arguably well spent, even if the actually places the money went look silly.

Re:Frittered Away?

[fustakrakich]

Yeah, but the running gag is this 35 and 70 billion dollar "valuation" scam, which is phonier than a three dollar bill. How can anybody believe this shit? It has to be just the number the taxpayers will pay out in the next set of Wall Street Bailouts... Once again we are being set up as pansies during an election year grift.

Re:Frittered Away?

[whoever57]

If they managed to get a stake worth $7 billion from spending $2 billion, that $2 billion is arguably well spent, even if the actually places the money went look silly.

The problem is that the $2B spent is cold, hard cash that came from investors, while the $7B valuation is just an estimate, based on what a few people think. It may prove to be ephemeral.

Uber not so great as a whole

[Anonymous Coward]

For everything that Uber is good for a rider. It's bad for the industry as a whole. It's driven down rates, but at the same time ignored regulations, driver pay, and uniform service. When you basically have a short and quick application, no significant back ground check because myself was approved to drive even before being approved by Checkr the company doing the background check. This sends up red flags in so many ways, and now Uber is raising the percentage they keep from rates all the while reducing rates. The question then becomes ,what kind of people is Uber attracting to drive for them? Like myself I am looking for some extra money but frankly I lasted a couple days with Uber and realized the benefits apply only to riders with Uber. Most drivers can't seem to even make minimum wage much of the time. We all complain about low wages until those low wages benefit us financially. I can't tell you how many Uber forum people said they hate being a Uber driver for lack of money. But will gladly use the service, even knowing how poorly drivers are paid.

Re:Uber not so great as a whole

[AvitarX]

As someone in a smaller market, the cost is a very minor part of Uber.

There's also the fact that I can actually get a ride.

I've waited 90 minutes for a cab, while Uber in the same location same time of night is always under 10.

I'd happily pay 25% more than cabs for Uber (and when there's surge pricing I often pay more than that even), cabs aren't worth it (in Philadelphia outside of center city, in northern Delaware, and in New Orleans. In San Fransisco, I'd use the Uber app, but often just to hail a cab.)

That's dealing with a Chinese company for you

[Opportunist]

Whenever China finds out that something you do is profitable, they'll sure find a way to wrest it from your hands. In the end, anything that's profitable in China has to be in Chinese hands, in one way or another. If nothing else, you'll be forced into a joint-venture with a Chinese "partner". With "partner" being something akin to being married in a shotgun wedding.

Ride-hailing company?

[Anonymous Coward]

In a different article it was called "ride-sharing".

Why don't you just call it what it really is - an unlicensed, unregulated taxi company.

Re: A "truce" indeed

[LynnwoodRooster]

No, they spent $2 billion in hard cash - and got back paper that has a supposed value of $7 billion. Now the fun begins trying to sell pre-IPO stocks in China...