By Tom Huddleston Jr. and Alan Murray
August 1, 2016

Good Monday morning.

Uber has abandoned its very costly battle for the Chinese market, agreeing to merge its China service into local rival and market leader Didi Chuxing, and continuing the bifurcation of the global tech market between Silicon Valley companies and their Chinese rivals — Google and Baidu, Twitter and Weibo, Xiaomi and Apple, and so on. As part of the deal, investors in Uber China will get a 20% stake in the combined company, and Didi will make a $1 billion investment in Uber’s main business.

As Fortune‘s Scott Cendrowski points out, Uber had little choice but to bow out of a market in which it was losing roughly $1 billion a year and making slow progress in gaining market share. CEO Travis Kalanick described the deal as a decision of the head over the heart.


The deal also frees Uber to spend its money elsewhere – like in mapping. The company announced a $500 million investment to expand its internal mapping program, so it will be less dependent on Google data. Both Uber and Google are working on self-driving cars, which require ultra-accurate mapping data.


More news below.

Alan Murray


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