Merging into Monopolies

monopoly

The big news this morning is that Uber China and Didi Chuxing are merging. The rivalry was one of the biggest recent tech battles, with both parties well armed with billions of dollars.  I don’t think there’s a doubt in anyone’s mind anymore about who will win the massive Chinese ride-hailing/ride-sharing market.

Come to think of it, I think the same question is now pretty much answered for the global market, as well.  It would be rational at this point for Uber to acquire Lyft for probably about 10% of its enterprise value, and get rid of the last credible threat to its US dominance.

The picture in Uber’s market reminds me of Peter Thiel’s much discussed 2014 article about monopolies.  I suspect we will see other examples of merging into monopolies in markets with strong network effects.

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