Uber Sells to Competitor in China

Many startup entrepreneurs believe that China, with its huge population, is the perfect place for them to find a market to conquer. The folks at Uber also thought China was a market of limitless possibility. In fact, the ride-sharing company had problems breaking in to the market there. On August 1, 2016, they announced that they would be selling their operations in China to their primary competitor: Didi.

Listen to this 3:35 minute discussion between the co-host of Here & Now Jeremy Hobson and Curt Nickisch of Harvard Business Review:

Why did Uber decide it was time to sell its Chinese operations? Nickisch references a case study on Uber for The Harvard Business Review.  In the radio program, he lists a number of reasons. Those include:

  • Uber entered a market with popular taxi-sharing applications applications already in place.
  • They had to undercut competitors to gain traction. To do this, they offered subsidies to drivers.
  • Drivers often gave rides to friends and family to take advantage of the subsidies.

What will Uber do now that, China, their largest predicted growth market is no longer theirs? We’ll be watching and learning. That’s for sure.

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