Ride-hailing: a cut-throat sector

The Chinese ride-hailing app Didi Chuxing is in talks to take over Ofo as the bike-sharing start-up bleeds cash in the cut-throat sector. Dockless bike-sharing was one of the fastest growing fads in China and companies offering the service have proliferated over the past couple of years, expanding rapidly across the globe. But the fight for market share led rival groups to burn through vast sums of money. After some fell by the wayside, the sector has been reduced to two companies: Alibaba-backed Ofo and Mobike, which was bought this year by the food delivery and services company Meituan Dianping. Vandalism, theft and poorly maintained bikes have added to the tales of woe, along with “bike graveyards” in cities across China… Meituan, which is aiming for a $60 billion valuation in its upcoming initial public offering in Hong Kong, has been making inroads into other sectors… Didi, which already holds a stake in Ofo, has previously ended cash-burning competition by buying its rivals — including the Chinese operations of Uber, which it acquired in 2016 in return for a 20 per cent stake… Local media have reported that Didi’s offer values Ofo at $1.5 billion, about half the amount Meituan paid for Mobike.
 
Louise Lucas, Henny Sender and Yuan Yang

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