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Justin Fox

Uber Decides It's Getting Tired of Competition

In China, it finds fighting for a whole country's business is hard.
Four stars for the effort.

Four stars for the effort.

Photographer: Brendan Smialowski/AFP/Getty Images

Uber, after throwing a few billion dollars at China and not making much headway, is now throwing in the towel and selling out to rival Didi Chuxing. As somebody who wrote a column from Beijing a few weeks ago headlined, “Uber Isn’t Going to Conquer the World,” I’d crow about this -- except that I’m not sure Uber’s decision really backs up my argument.

The argument was that the business of ride-hailing is one of individual cities. In a city (metropolitan area, really), the market leader can rely on the “network effects” that make a service more valuable as more people use it  to establish a near-inviolable competitive position. On a national or global basis, not so much. This quote from Arun Sundararajan, a professor at New York University’s Stern School of Business, summed it all up nicely: