Taxi-booking app Uber agreed to sell its business in China to Didi Chuxing. The two firms had been fierce competitors, but Didi Chuxing had controlled the Chinese market with an 87% share.

    Uber China launched in 2014, but it had failed to make any profit for a long time. Cheng Wei, founder and chief executive of Didi Chuxing, said the two companies had learned a great deal from each other over the past two years in China. He added that the deal would set the mobile transportation industry on a healthier path of growth at a higher level. As part of the deal, Mr. Cheng would join the board of Uber, while Uber chief executive Travis Kalanick would also join Didi's board.

    Uber's China business would own its separate branding while US-based Uber Technologies would hold about 17.5% in the combined company. Didi Chuxing is backed by Chinese Internet giants Tencent and Alibaba.

    Uber had been struggling to break into the Chinese market despite having Chinese search engine Baidu as an investor. Last February, the company admitted it was losing more than $1 billion a year in China. “Funding their Chinese dreams was becoming too expensive for Uber,” Duncan Clark, chairman of Beijing-based consultancy BDA, told the BBC. Travis Kalanick said, “As a businessman, I've learned that being successful is about listening to your head as well as following your heart.”

    The fierce competition had led both companies to spend much more on their journeys. The combination is likely to see fewer such subsidies（补贴）. “One thing to watch carefully is how quickly consumers feel the impact as subsidies are withdrawn.” Mr. Clark added.

    The deal with Didi Chuxing came just days after China had agreed to provide a legal framework for taxi-ordering apps. Both Uber and Didi welcomed the decision. The new rules took effect last November and could, among other things, forbid such platforms to operate below cost.