Uber to Sell China Business to Rival Didi After Losing Billions

This will be the biggest market for uber like services, if it isn't already. But it is also way cheaper here, so that changes the dynamics a bit.

This depends on your frame of reference. If you're comparing with SF, sure. If you're comparing with London or New York, less so. In London, the underground is faster than private car for many (most?) daytime journeys. In Beijing and Shanghai, a private car is almost always faster. Subway stations are spaced too far apart, and the walking involved in changing lines is pretty long. Buses are slower than cars even at times when bus lanes are active.

"While China is a large country, not everyone can afford an automobile or a rideshare service."

The people who don't have cars are precisely the people who use rideshare services.

Compared with the West, in China, ridesharing fares are lower, and the cost of owning+operating a car is higher. I ride Uber 10-15 times per week. The total cost of those rides is 20%-30% of what it would cost to lease and operate my own car, even if parking were free (which it's not).

> I would conjecture that China was never a large part of Uber's valuation

These two statements are not exactly congruent. Investors in later funding rounds would have expected their investment to be used to grow the valuation. In other words, they were funding the losses in China so they should expect a return.... unless they were just investing in Uber due to FOMO.

Scooters? Everyone hates them.

Personal experience: my hometown is a medium city (with a population of ~3 million in urban area), the taxi system there is so broken. Because of the medallion system, to maximize the profit/cost ratio, taxi drivers usually operate their cars 24 hours a day with two shifts. Day shifts are usually taken by locals, and they will try their best not to serve you if the trip goes through traffic-jammed area or remote places. I understand their economic reasoning though. The worst part is every afternoon from 4pm to 6pm, when shift change happens, every taxi driver will refuse your ride request unless you happen to be ride sharing with them to their shift change stops(pretty ironic I think). So as a rider you basically beg for a ride.

That's how Uber/Didi win. You don't beg, you don't worry, you don't get pissed off. You uses an app then you get on a car with better fare (thanks to those steep discounts)

Remember, this is just one city with population of 3MM, there are more than 100 of such cities (with population of 1~3 million) in China. But Uber is not operating in my hometown, let alone many others.

Uber is slow to adopt Alipay or Wechat pay. Uber is slow in expansion.

I would conjecture the opposite as Uber investors were pitched on the China growth story

> Four out of the top 10 are now in China, according to an email sent by Uber CEO Travis Kalanick to investors and obtained by the Financial Times.

> In the request for money from investors, Kalanick explained just how fast the company is growing:

> Passengers in China are taking 1 million trips per day. Uber is in 11 cities in China, but plans to launch in 50 more cities that have a population of more than five million this year. These are all cities comparable to the size of Miami, Kalanick said in the email.

> Four out of Uber's 10 largest cities are in China.

> After nine months in Chengdu, the city is seeing 479 times the number of trips that New York did at the same mark. Hangzhou is 422 times larger than New York at the same nine-month mark and it is adding 200,000 residents a week.

> The company is planning on investing more than $1 billion into UberChina, which goes by YouBu or "an excellent step forward", locally.

> It is now the largest market outside of the U.S., and "at the current growth trajectory, will most likely surpass the US before year-end," Kalanick said int he email.

http://www.businessinsider.com/uber-china-growth-2015-6

"Uber Technologies will receive 5.89 percent of the combined company with preferred equity interest equal to 17.7 percent of the economic benefits."

Also seemed like Uber were going wild at the time - Easter weekend was totally free for all riders all weekend iirc.

Does that $2bn 'investment' figure include the $1bn/year losses they were incurring competing with Didi? Uber ploughed in more than $2bn into China, and got less than $7bn (as sibling comment says, the $7bn is not all going to Uber).

I agree on the second point - the value of whatever percentage Uber owns is likely to go up.

It's called Chaebol (재벌) in Korea, Zaibatsu (財閥) in Japan, is there a name for it in modern China?

If the partnership remains in place, then this is likely a good thing for Lyft. Recall that, unlike Uber, Lyft wasn't trying to storm China and establish itself as a direct player there. Rather, they established a collaboration with Did whereby each company's customers could benefit from the other company's services in their respective countries. As such, assuming the partnership remains alive, this would mean Lyft has an even stronger partner now in China.

https://en.wikipedia.org/wiki/List_of_largest_companies_by_r...

Fact is, China has monopoly and merger control laws.

Facebook's IPO was much larger at $104B