Doing business in China and competing with home-grown players is not easy. Uber seems to have found a way to still benefit from growth of the China market without the cash drain ( estimated at $2 billion to date ) of direct competition with Didi Chuxing. Uber won't get the full benefit, but at the same time it is a much better outcome than simply stepping away from the market due to the heavy cash drain.
Uber has agreed to sell its Chinese operations to rival Didi Chuxing, ending its costly battle for the Chinese car-hailing app market. Under the terms of the deal, Didi will acquire all of Uber China’s operations and investors in Uber China will get a 20 per cent stake in Didi. Didi said Uber would receive a 5.89 per cent stake in the Chinese company — but would have “economic interests” equivalent to 17.7 per cent with another 2.3 per cent going to the Uber China shareholders. Didi, China’s largest car-hailing app company, will also invest $1bn in an equity stake in Uber’s global business, in a transaction that brokers a truce between two of the most fiercely competitive car-hailing app companies in the world.