Last year, four of Uber's biggest rival cab-hailing services – India's Ola, China's Didi Kuaidi (now Didi Chuxing), U.S.-based Lyft and Singapore's GrabTaxi – got together to form a global alliance. Under this alliance, all four companies would let customers seamlessly book cabs from each other's apps, depending on the region the user was in. This partnership would also enable these companies to combat the growing might of Uber – the world's most valuable startup – by sharing customers across the world.
But even before this integration saw the light of day, in a surprise announcement, Didi acquired Uber's China's operations.
Under the deal, Uber Technologies and other shareholders of Uber China will receive 20 percent stake in the new company. Under the terms of this deal, Didi founder Cheng Wei and Uber Chief Executive Officer Travis Kalanick would join each other's boards.
“I have no doubt that Uber China and Didi Chuxing will be stronger together,” Kalanick had written in a blog post obtained by Bloomberg before its publication.
Over the years, Uber and Didi had been bleeding cash in China competing against each other. Uber, in particular, had spent $1 billion per year in the last two years on its China operations.
But, what does all of this mean for India and the global alliance that the four companies had forged? While a chunk of the funds will now be diverted to India and other south-east Asian countries, it's worth pointing out that Didi Chuxing happens to be an investor in Ola, which is embroiled in a battle with Uber for market share in India.
Grab's CEO Anthony Tan said that the Didi-Uber deal is a victory for Didi and it signifies how the ride-hailing business favours domestic players. While Ola's Aggarwal seems to share that sentiment, at a recent event, he told BloombergQuint that the global alliance is still intact. Aggarwal made this revelation for the first time since the Uber-Didi deal was announced. “The global alliance is not a flash in the pan. If you look at other industries- telecom, airlines, it makes a lot of sense for different geographical players to come together and offer seamless connectivity to each other. It's a business proposition and whenever it's a business proposition, it ends up happening at some point,” he maintained.
In the future, customers will be able to use the Ola app in the Middle East, in Europe or in the US and such a roaming arrangement will continue to exist since it makes good business sense, Aggarwal said.
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