Uber China investors will receive a 20% stake of the new company.
“As an entrepreneur, I’ve learned that being successful is about listening to your head, as well as following your heart,” Travis Kalanick, CEO of Uber, wrote in a blog post reported by Bloomberg.
“Uber and Didi Chuxing are investing billions of dollars in China, and both companies have yet to turn a profit there. Getting to profitability is the only way to build a sustainable business that can best serve Chinese riders, drivers and cities over the long term.”
Uber has sunk more than $2 billion in China to little effect, and neither it nor Didi have seen profits from their investments in the country. China has only recently passed a law legalizing ride-sharing businesses, which it previously suppressed. will allow for expansion of the businesses.
The U.S.-based company is reportedly planning to spend $500 million on a global mapping project, which will wean its dependence on Google Maps. This will also make it more accurate in countries where there is a high volume of passengers, but less accurate maps.
Uber appears to be consolidating its resources as it makes vertical moves toward driverless cars and proprietary mapping tech.