Uber’s new year is not off to a wonderful start.
Among the organization’s most important opponents, China’s Didi Chuxing, is purchasing another ride-hailing firm from Brazil, 99.
The deal is set to create Didi even larger and pits its services against Uber in yet another nation. That is not something Uber needs as it tries to get back on track after a rough 2016.
China’s Didi Chuxing affirmed the acquisition on Wednesday this morning. It was first reported by TechCrunch.
“The success that founders and team of 99 have attained in Brazil Celebrate the very spirit of entrepreneurship and innovation in the LatAm area. Building on the profound trust between our two teams, this new level of integration will bring into the area more suitable, value-added mobility services,” Chen Wei, founder and CEO of Didi, said in a statement.
Uber declined to comment.
The deal isn’t good news for Uber, which also works in Brazil. The deal doesn’t necessarily crush Uber’s surgeries, but it definitely makes it tougher for Uber to grow its user base worldwide — something it should do as it seems to pull from its 2016 tailspin and start turning a profit.
Didi raised $4 billion in December, giving it a fresh dose of financing to allow it to grow.
Uber has bowed to Didi’s power before. After years of attempting to cultivate its operations in China and contend with Didi, Uber surrendered into its rival and agreed in August 2016 to some merge its China company with Didi. Uber owns 20 percent of their new joint entity and obtained a $1 billion investment in Didi, therefore it wasn’t a complete loss. Nevertheless, it turned out to be a very clear sign that Uber must make tactical decisions that may not mean worldwide dominance.
Since New York Times reporter Mike Isaac notes, the ride-hailing industry is a cluttered one.
A concise recap: Uber fought Didi in china for decades, then Uber backed from China however took a massive bet in Didi and remains a significant shareholder. Now Didi is combating Uber in Brazil via 99.
Ride-hailing is a bizarre market, with frienemies everywhere
— ಠ_ಠ (@MikeIsaac) January 3, 2018
Uber and Didi have financial stakes in each other’s success, and their rivalry in Brazil just jumped to a different level. Meanwhile, the Uber is combating Google in court within its self-driving car company Waymo. Uber’s biggest U.S. competition, Lyft, finally started working internationally with the launching in Toronto, Canada last year and has reportedly gained ground from the U.S. Didi also invested in Lyft back in 2015 and launched cross-platform services from the U.S. in 2016.
One glowing light for Uber is the fact that it now has two experienced executives in the helm. Dara Khosrowshahi, formerly CEO of Expedia, chose the wheel from contentious cofounder Travis Kalanick in September. He hired a second-in-command Barney Harford, former CEO of online travel site Orbitz, as Uber’s new chief operating officer.
That team will have to decide how and where to move forward– legally, of course.
Read more: http://mashable.com/