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Lyft’s partnership with Didi is on the skids after Chinese app merges with Uber

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Lyft, the number two ride-sharing app in the US, says it will reevaluate its partnership with Didi Chuxing, the dominant service in China. This comes after the latter announced Monday it was acquiring Uber’s China operation.

Lyft and Didi have been partners since last December, when the two companies formed what was widely viewed as an anti-Uber alliance, along with Ola and Grab, the largest ride-sharing apps in India and Southeast Asia, respectively. The team-up was meant to stem Uber’s growth in Asia, while also boosting Lyft in the US and preventing a global takeover by the aggressive Uber.

That partnership allowed Didi customers to use their app to hail a Lyft driver when traveling in the US, and vice versa for Lyft users in China. But that now seems unsettled after Didi and Uber announced their merger.

In a statement, a Lyft spokesperson took a veiled swipe at Uber for even bothering to compete with Didi in China, given the favoritism shown to homegrown businesses by Chinese regulators.

“We always believed Didi had a big advantage in China because of the regulatory environment,” the Lyft spokesperson said. “The recent policy changes are exactly why we did not invest in the region. Over the next few weeks, we will evaluate our partnership with Didi.”

Uber’s deal with Didi, which values the combined company at $35 billion, raises serious existential questions for Lyft, which has been struggling to gain sufficient marketshare in the US.