Uber seems to have given up trying to compete with China’s dominant ride hailing service Didi Chuxing.
Bloomberg reports Uber Technologies’ China unit will be merged with Didi, creating a virtual monopoly worth an estimated $35 billion.
According to unnamed sources, Uber will get a 20% share of Didi Chuxing while the Chinese firm will pump $1 billion into the core Uber business.
"As an entrepreneur, I’ve learned that being successful is about listening to your head as well as following your heart. I have no doubt that Uber China and Didi Chuxing will be stronger together," Uber CEO Travis Kalanick wrote in a blog post.
"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."
The news of the deal comes just days after the Chinese government formally passed an amendment legalizing ride-hailing apps.
Uber China’s investors, which include homegrown internet giant Baidu Inc, have been calling for Uber to offload its China business, Bloomberg says.
It has lost more than $2 billion trying to compete with Didi, sources say.
In the short term at least, Uber will continue to operate its own app in China.
