Discuss: What does the Didi & Uber merger mean?

So this just happened.

Didi Chuxing and Uber are now singing to the theme song from “Barney and friends”. The bullets have stopped whizzing by, and the doves are let loose. There is peace on earth now. At least with regards to the ride-hailing war in China.

This turn of events was unexpected, with the sudden ceasefire and unification of both previously rival companies. Both Didi and Uber were taking potshots at each other by aggressively offering crazy subsidies, and earlier in June, trying to outdo each other in funding.

What does this mean for the ride-hailing market in China?

Personally, I feel there are particular strategic implications behind the acquisition. One being the ceasing of the mindless spendings on subsidies, probably the first step in aiming for profitability. The second would be to better fit and adhere to the new rule passed by the Chinese government for ride-hailing services. And third, Uber being under pressure by its investors to sell off its China assets. Perhaps, just perhaps, a merger was already on the table before, and Travis finally snapped and gave in?

Let’s discuss

• What do you think is the basis behind the merger?
• Do you think an IPO might be in the works?
• Will the merger damage Didi’s reputation amongst the “Anti-Uber alliance“?
• Was either party losing out, and had no other choice than to be pushed into merger?