Why does Uber need to be in China again? Why can't they be happy growing their service and providing better services (like better driver auditing and education) for the North American market?
If they spent $1 Billion improving their service it's better than trying to outspend a natively innovating company in China backed by local people running under different rules.
Uber has to be in China because they raised $RIDICULOUS on a valuation of $MORERIDICULOUS. That valuation is premised on the idea that they will somehow be part of the fundamental physical infrastructure of the world, in a more-than-just-taxicab kind of way. Disclosure: I think that this is an absurd premise. But it's their ambition.
So they have to eventually show solid steps on being more than just a taxi company for rich dense North American cities, because they claimed they were worth $MORERIDICULOUS. They have to pursue some more ambitious schemes. One of those is getting a dominant position in the market of the 1/7th of the world that is most rapidly growing in wealth.
Better driver auditing and education? Ha ha ha. Dude their whole strategy is to bleed out poor schmucks that get in debt thinking they are going to hit the jackpot.
The company that's losing $1bn/year, Uber China, appears to be a separate company just focused on China (valued at $8bn against Uber proper's $60 odd bn and Didi Kuaidi's $16.5bn) and so pretty much has to be in China. If that wasn't the case I could see the argument for just not bothering there.
It's quite a handy thing with Uber having just been in Saigon, Taipei, Manila and similar it was a pleasant surprise to find Uber just worked, avoiding having to research local taxi scams, trying to figure you've got change in local currency when you've just landed and so on.
Presumably, the ROI on penetrating the world's largest market is significantly higher than the ROI on a marginal increase to their dominant market share in North America.
If they spent $1 Billion improving their service it's better than trying to outspend a natively innovating company in China backed by local people running under different rules.