> > > As late as this past June, Uber was predicting it would pass its rival within a year.
> This is simply not true.
Yes it is true. Kalanick's investor updates from 24-12 months ago were all gung ho on China and how Uber was seeing as much or more success there as any Western country ever had. Their explicit goal was to outcompete Didi and become the #1 on-demand service in China (on-demand generally... not just for transportation). Their timeline for winning majority market share was 12-24 months out, and that is how they justified the extremely, extremely aggressive cash burn in the market. (Nobody burns $1B+/yr in cash gunning to grow slowly into second place.) Believe me when I say that several billion dollars of raised capital and $10B+ of Uber's imputed valuation was attributed to their potential in China, their growth there, and their plan to dominate in the next 12-24 months.
What evidence have you that this is "simply not true." Some of these statements to investors have become public knowledge, which you'll see with a simple google search.
Just one of many articles and quotes from this timeframe outlining Uber's explicit goal of becoming dominant in marketshare in China within a year: http://www.digitaltrends.com/business/uber-beat-didi/ Note as well how cocky and aggressive Uber was here in their marketing, public statements, etc.
> Also I don't view the merge of Uber China and Didi as a failure on Uber's side.
It was absolutely a failure. Uber's goal was to beat Didi and dominate in China, as is their goal in every single market they enter. Did they succeed or fail in that goal?
Uber did a good job salvaging value here in having its Chinese operation acquired by Didi. But make no mistake, it was a failure and this falls far short of both their intentions and their promises to investors.
Also, this was forced on Uber by investors. People lost faith that Uber could win in China, and rightfully so. The cash burn was staggering and there was no end in sight and no clear path to actual victory, despite the previously lofty updates and promises.
> It's more or less a peace treaty or truce
No. A peace treaty or truce means each side remains independent but they agree to stop warring with each other. This is an outright purchase. Uber lost the war and it's best option was to salvage value in Uber China by merging into a minority, small position (only 18%) within Didi's business.
> Uber-like service is simply too cheap in China for a long time, (I Uber to work for less than $2 for example), and both side cannot hold it any more. It's as simple as that.
Yes. It was a war of attrition. And Uber lost the war. As simple as that. That's why it makes no sense that you're framing this as somehow just a "peace treaty".
> Before the Didi-Uber merge, there's a similar merge of Didi and it's major competitor Kuaidi..
Yes, this was a brilliant move on Didi's (and Kuaidi's) part. On top of this, Didi struck a partnership with Lyft. In terms of military strategy, Didi was encircling Uber on all sides. Instead of having to fight a war on two fronts with Kuaidi and Uber, they used Kuaidi and Lyft as springboards.
This was absolutely brilliant and bold strategy and it's an approach few start-ups could pull off or would even attempt trying. M&A and mergers are extremely complex for start-ups to tackle and this was brilliant strategy.
2 years ago, Uber was playing the role of the big dog and pressuring to buy Didi. After Didi's great growth and very effective strategy over the past two years, the roles were totally reversed and Didi bought Uber's China operations for what was ultimately a pittance. 18%, which will be further diluted over time.
> The story between Google and Baidu is a whole different one. First search engine as a gateway to informations is viewed as vital by the Chinese government and government really worked on Baidu's side.
I think the governemnt helped Didi quite a bit too. As did Tencent.