Uber lost in China, flat out.
> Negate Lyft's efforts to run around Uber in China by empowering Didi to crush them
What? Didi and Lyft struck a deep partnership. Lyft doesn't have Chinese operations. The pressure induced on Uber by Didi and Lyft working together is part of what got Uber to admit they were losing the fight and didn't have a reasonable path to victory.
As for framing their 20% stake (actually, it is 18%) as a win, consider this:
Uber burned over $2B in cash in China. If simply owning a % of Didi was an acceptable "win" state for Uber, they would've been much smarter to simply invest that $2B into Didi. Just a year ago, Didi was valuated at only $13B... even then, the $2B would've resulted in a ~13% ownership stake. Last year, they were valuated under $10B. Tencent got a ~20% stake in Didi for just $15M only 3 years ago.
In fact, Uber could've played a much stronger hand and ended up with far more than 18% of Didi if they'd offered to invest $1-2B and agreed not to enter China in the first place. Or, they could've made a credible threat by growing rapidly (as they did) for a year, and then offering a merger + an investment from a position of strength. Instead, they played a suboptimal strategy. They continued to operate in China and their growth slowed, meanwhile they burned even more money, their investors started making noise about backing out, and they gave Didi time to strike huge strategic partnerships (Kuaidi and Lyft) and raise a bunch more money, all of which strengthened their position relative to Uber even further.
The time to strike a combination with Didi was 1-2 years ago. They could've got a much, much better deal while still spending only the same total amount of money.
This was a loss for Uber, and it absolutely wasn't their intended outcome, nor their best outcome.
Uber has absolutely dominated in other markets. So, it's not like they're dummies or poor operators. They are amazing in terms of market domination. But let's not put a sugar coating on this. Call a win a win and a loss a loss.