Uber Technologies Co. announced today that it was selling its Chinese affiliate to rival Didi Chuxing Technology Co. The Wall Street Journal reports that the sale is the end of a three-year effort by Uber to penetrate the Chinese market. In the end, Uber had approximately 10.1 million riders to Didi’s 42.1 million. Didi merged with another rival in 2015, Kuaidi Dache, effectively extinguishing the Kuaidi brand post consummation. Uber will be taking a sizeable stake in Didi in exchange for its business.
From an American antitrust standpoint, this deal could have drawn significant investigative interest. While not faring nearly as well as its local rival, Uber had invested a great deal of time and effort into developing a Chinese presence. Indeed, it had developed a base of over 10 million riders. By most measures, Uber is not an insignificant competitor and would not be considered “failing” or even “flailing.” Indeed, one might even see them as a classic maverick.
A particularly aggressive enforcer might also take a hard look at what was actually promised in the negotiations between Uber and Didi. Uber is taking a large chunk of Didi’s stock in exchange for exiting the market. The noncompete will also be of particular interest.
But this is China. Their anti-monopoly law is relatively new, and they bring few actual challenges to transactions. Didi is also a national champion in the high tech space, a place where very few companies worldwide successfully challenge American supremacy.