Leading China taxi apps Didi Dache and Kuaidi Dache to merge, posing new challenge for Uber

Economic IndicatorsAssociated Press

Leading China taxi apps Didi Dache and Kuaidi Dache plan to merge, creating a new challenge for Uber Technologies Ltd.'s global expansion.

Didi Dache, backed by Internet giant Tencent, and Kuaidi Dache, backed by rival Alibaba Group, command about 99 percent of the taxi hailing market in China and are used mostly by taxi drivers.

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Executives from the two companies said Saturday that they will share management of the newly merged firm, with the brands retaining their own corporate identities. They said a formal announcement would be made in coming days.

The move stands to slam the door on the China market, offering a potential further setback for Uber, which faces legal challenges in South Korea, India, Europe, California and other markets for using drivers who lack taxi licenses.