It seems like Uber’s investors want to bring a halt to the massive Chinese cash giveaway that’s creating jobs for unemployed steel and coal workers, but not making much money for shareholders.

Several institutional fund managers are pushing the US ride-hailing giant to make peace with China’s Didi Chuxing, which is eating its lunch in the local market, Bloomberg News reports.

Such a truce makes sense for the obvious reason that it could allow both sides to stop burning cash and start turning a profit. As David Fickling and I wrote last month, the massive amounts being spent by Uber and Didi aren’t buying customers and their loyalty, but rather transferring wealth from those who have a lot of it to those who don’t. A self-aggrandizing press release from Didi this week states that “530,000 of its drivers came from coal, steel and other sectors with obsolete capacity.”

Beyond a desire to end their unintended philanthropy, Uber shareholders ought to be seeking peace for a more global reason. Although Uber has established Uber China with its own distinct line-up of investors, including Uber’s US mothership, the company has mostly gone solo around the world. That’s a solid strategy, ensuring a consistent experience.

But it’s not the only approach. Didi, like most Chinese technology companies, is strong in its home country and almost nonexistent overseas. That’s not been a weakness, as evidenced by its commanding share of the nation’s ride-hailing market.

Outside of China, though, Didi has started forging partnerships with Uber’s competitors. In the US, it’s working with Lyft. In India, users will be able to hail an Olacabs car from their Didi app; similarly through Southeast Asia, where it’s hooked up with Grab.

So instead of the $12.7 billion CB Insights estimates Uber has raised to face off against Didi’s $8.5 billion in China alone, the US leader is actually competing with a more comparable $12.3 billion in at least eight countries. Add to that Didi’s direct links to new and powerful BFF Apple, and you start to understand that Uber’s position atop the heap is by no means assured.

And given Didi’s clear appetite for cooperation, as opposed to Uber’s reputation for confrontation, it shouldn’t be long before President Jean Liu signs up more local partners to extend the company’s geographical reach even further. If that were to keep happening, Uber could be expected to continue gifting money to drivers and consumers globally.

Whether deliberately or by accident, the American superpower’s bid for peace could be just what’s needed to stem the spread of ride-hailing socialism.

Source: The Economic Times