Uber yesterday admitted defeat in China, folding its business into that of its major competitor, dominant China ride-sharing service Didi Chuxing. But it’s hardly humiliating – Uber will emerge with a 20% stake in the new US$35b Chinese taxi monopoly, in what amounts to a major carve-up by existing Chinese on-line giants Alibaba, Tencent and Baidu. This is a monster prize, and even Apple is in, having agreed a few months ago, somewhat presciently, to pump in US$1b. It’s highly likely that all the players mentioned above went up last night. After all, it’s the end of a subsidy war (to drivers and passengers) that has cost more than US$6b to date in accumulated losses by those players, and it could have gone on a lot longer. It’s just another salutary lesson in just how valuable the benefits of scale have become. Think about it. There is no other time in history that Uber (or Didi, or Airbnb – I could go on) could become so large, so quickly. These companies can only work if Read more here (VIEW LINK)
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