Apple-Backed Didi Chuxing to Purchase Uber's Ride-Hailing Operations in China
Chinese ride-hailing service Didi Chuxing is set to acquire the Chinese operations of rival Uber in a $35 billion deal, reports Bloomberg and The Wall Street Journal. Apple notably invested $1 billion in Didi Chuxing back in May, giving Apple access to data and expertise on electric and autonomous car technology, as well as a foot in the door with the Chinese investment community.

The valuation of the combined ride-hailing company is $35 billion, the people said. Investors in Uber China, an entity owned by San Francisco-based Uber, Baidu Inc. and others, will receive a 20 percent stake in the combined company, the people said. Uber will continue to operate its own app in China for now.
Didi is making a $1 billion investment in Uber at a $68 billion valuation, people familiar with the matter said.
As noted in a forthcoming blog post by Uber CEO Travis Kalanick that was obtained by Bloomberg, neither Uber nor Didi Chuxing has turned a profit in China despite billions of dollars in investment, and combining operations will help smooth the path to profitability and a sustainable business.
Apple is of course widely rumored to be working on its own car-related project dubbed Project Titan, an effort that is an "open secret" in Silicon Valley according to Tesla CEO Elon Musk. The most recent developments with Project Titan include a new chief in veteran Apple executive Bob Mansfield and a new focus on autonomous driving software that could give Apple flexibility beyond plans to build its own vehicles.
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What I've just described, along with Uber's huge success, has made them the poster child for what's been dubbed the "gig economy." The way in which some people work (and many of those may prefer to work) is on a gig basis, much like the traditional form of contracting. To proponents this is like a buffet, they can pick and choose a combination of tasks (sometimes very small like an Uber ride or sometimes much larger like a months or years long project) and have flexibility in both the type of work they do and schedule. This *can* involve higher payment than 9-5 "w2" work but also generally comes with expenses (freelancers need to provide their equipment for the job in many cases) and could be lower net after tax implications (1099 workers are responsible for the full set of taxes [payroll tax] w2 workers typically aren't aware of because their employer pays them on their behalf) etc... The other side of this arrangement is that a "gig" worker isn't going to have the traditional set of benefits (health insurance, paid time off for vacation or sick, retirement plan, etc...) that traditional employment has provided. The latter has many people concerned.
Finally, Uber has a history of viewing existing laws on taxi services as protectionist or back door revenue generators for the local governments that enacted them and as a result has taken a strategy of just disregarding those laws in the hopes of becoming popular enough to force change. In some cases they've just openly paid fines for their drivers if they were caught and continued right on until specific action was taken in cities (or countries) to outright ban them. In any case, explicitly violating laws (although not criminal, typically ordinances) is shady but again there are two very different perspectives in place here. To the Silicon Valley technolibertarian those laws are protectionist for an entrenched oligopoly and the only way to get a foot in the door is to violate them until the masses support you and demand change (Uber becomes incredibly popular with customers almost every it goes and has a long history of achieving that change if it operates long enough). To the labor/union supporter they are an evil group bringing in low cost scabs and pushing out traditional jobs and their strategy of ignoring ordinances is another arrow in Uber's opposition's quiver.
There's no black and white in any of this. Some of the anti-Uber claims are just laughable (early on the big push was that taxis are regulated and thus safe but Uber's unregulated vehicles would be death traps, I use Uber on a regular basis and every vehicle I've been in has been clean and sound unlike the many taxis I used prior that rattled and shook with every acceleration or brake, many of those were down right scary). Some of their claims have merit (they've now shifted to more focus on the status of the workers and broader implications of a widening gig economy, whether or not that frightens you becomes more of a philosophical debate).
Full disclosure, I am a regular Uber customer and very much enjoy the service. As someone who travels frequently and dealt with the horrible state of traditional taxies prior to Uber's existence I'm very happy they have come to be and now would rather walk than take a traditional taxi. Hopefully I've stated everything here from a neutral perspective though.
edit: or are there two deals going on here, Uber China receiving 20% stake in Didi per the headline deal and Didi making a separate $1BB infusion to Uber (as in the US parent) against a $68BB valuation (of the parent)?
edit 2: read the non-paywall article, the first edit is correct. This is 1) a merger of Didi with Uber China to continue operating under Didi brand and management; for this merger Uber China stakeholders will receive a 20% share of the merged entity. 2) Separately but possibly (likely?) related, Didi making a $1BB investment in Uber USA at a $68BB valuation (about a 1.5% stake of Uber USA). I'm not in M&A but I'd call that an $8BB deal (or $7BB and $1BB deals).
Uber is a despicable company with the ethics of Google, and Apple is now a part of that.
I'm trying to remember when Apple last did something that surprised and delighted me; perhaps it was the Cookie Monster ad.
Thank goodness for small mercies.
See also: https://www.macrumors.com/2016/07/28/bluetooth-headphone-revenue-up-iphone-7-launch/
The issue is technology companies, and really its a tit-for-tat battle. America refuses to let Huawei robust access to the American market on 'national security concerns' so China does the same to U.S technology companies. Part of it is letting domestic technology companies lead the way (i.e. infant industry argument) another is national security reasons. Apple is an interesting case. Apple's hardware business isn't at risk in China (China isn't going to ban Apple products). But, it's services (iCloud, iTunes, ext.) all must comply with Chinese laws. The court cases its losing are more a show of force than anything long lasting and basically a warning shot to Apple rather than anything more. Apple is actually a really successful company in China, despite what click-bait articles might suggest, any Anti-Apple protests are short-lived and have zero support from the vast majority. It's a way to show patriotism more than anti-americanism or anti-american company.
Uber was pretty successful in China and rivaled Didi pretty well. The trouble is that both companies aren't earning much money so consolidation is a step towards profitability. Even before this, Uber and Didi were technically illegal, but the CCP turned a blind eye for the most part. So, this isn't so much about Uber not being successful in China because it's an American company, more about consolidating and monopolizing the market rather than competition.
And, honestly, it wouldn't surprise me Apple were involved in these talks somehow. This could be a huge round-about way to get access to mapping data and self-driving car technology. It's not secret Uber and Didi are investing in self-driving cars, along with Baidu and other Chinese companies. Plus, remember that time Apple invested $1 Billion in Didi and then Didi invested $1 Billion Uber... That's just a coincidence, right?... It couldn't be Apple playing a long-con...could it? No... Never! Companies are honest, and straightforward and trustworthy!