Few months ago, I predicted that Uber and Lyft would eventually merge. My point is that most of these category-kings, after destroying value, pivot to eke out something at the end by combining. They need to because very soon both Uber and Lyft will have to battle a new enemy: Didi Chuxing, the China-based ride-sharing startup.

In this piece, I explain why Uber and Lyft will merge. The trajectories both are following show that they will have challenges with Lyft gaining on Uber, but the overall industry cooling. As soon as that happens, their margins, if they have any, will collapse. Once that happens, they will begin to talk of merger, with each other. Government will see their struggles, and will dismiss any anti-trust concern gone. The result: it will bless their union. Uber is today’s Category-King, but its  past behaviors have slowed it down, offering a window for Lyft to catch-up. As they become peer-competitors and rivalries, they will destroy the sector. I do see many close rivalry typical of others that ended together: Elance/Odesk (now UpWork),  Groupon / LivingSocial,  Sirius / XM and  Rover / DogVacay. Please add DraftKings and FanDuel in the list; I predict they will merge also despite any FCC ruling, at the moment. They will struggle, owing to wounds they inflict on each other, in coming years, and will be saved via merger.

Didi Chuxing defeated Uber in China, and absorbed Uber’s Chinese assets. The company just raised $4 billion to pursue a global expansion. That brings the year total to $10 billion. The company is now worth $56 billion, only behind Uber (2016; $68 billion) or ahead if you use the Softbank-led latest round (2017, $50 billion), in the most valued private technology startup category.

Didi Chuxing, the Chinese ride-hailing app that is Uber’s biggest rival overseas, has raised another $4 billion to aid its international expansion. Softbank and Mubadala Capital, a state fund of Abu Dhabi, both participated. Didi said it would use the cash to buy a fleet of 1 million new-energy vehicles (NEV) and the expansion of charging infrastructure

With this money, Didi Chuxing wants to move into Brazil, Latin America’s largest economy. It plans to take majority stake in 99, a leading ride-sharing startup that operates from Brazil. Didi plans to start operations in Mexico in 2018.It already controls the Southeast Asian market through Grab where with Softbank it invested $2 billion. Grab leads the Southeast Asian ride-sharing market. With 99 and Grab, Didi is holding two important regions. India’s Ola, which is the leading startup there, in the sector, has Didi and Softbank as leading investors. (Softbank is a Uber investor, so it will win irrespective of who survives.)

Interestingly, Didi has given up in U.S. (it has shut down its U.S. app), pushing its customers to choose Lyft to make life harder for Uber. Yes, Didi wants a stronger Lyft to weaken Uber at home and distract its global expansions. With multiple legal issues before Uber to deal with, Didi is expected to gain more grounds internationally. Lyft is gaining grounds on Uber already in U.S. Of course, Uber can manage the amalgam of bad press and distractions to evolve under its new leadership.

As Didi raises this unbelievable amount of money and Uber struggles globally and locally, even as Lyft remains largely a U.S. business, both Uber and Lyft may decide to combine. If they combine, Uber will be saved the trouble of fighting for its position at home (U.S.) and can then focus to challenge Didi internationally. On that premise, I believe that Uber and Lyft will merge to handle the challenges coming from Didi.

The year has basically come to an end. I am happy to name My Person of the Year – 2017. The Governor of Lagos State (Nigeria), Akinwunmi Ambode, is that person. Lagos state is one of the largest economies in Africa and a very strategic state within the Nigerian nation. With a population in excess of 24 million people, and gross state product of at least US $91 billion, it is the epicenter of the Nigerian economy.

In short, before Nigeria, there was Lagos, and over generations, the state has been blessed with some of the finest (pragmatic) leaders in the nation. These leaders continue to make Lagos the best state for business and an unparalleled place to be a Nigerian where your tribe will not necessarily hold you back. The excellence, the resilience and the entrepreneurial liberty of Lagos separate it from Nigeria. The center of excellence has seen the best political leadership in the nation for years.

Mr. Ambode continues on that tradition, and has managed Lagos fairly well. Lagos is a benchmark for other Nigerian states. He has brought a visioning system that looks into the future and continues to explore how to build an economic system that would be decoupled from the cyclical boom and bust of the Nigerian economy. Lagos is making progress across many metrics including primary health, primary education, road construction, and across industrial sectors. His efforts to deepen resources in the Yaba Valley will pay dividends in coming years.

He may not be perfect: some of the new roads are not top-grade. But no one can fault him for thinking big, acting bold and moving fast with fierce urgency of now. He is working hard to build and sustain institutions through balanced top-grade leadership system. He is My Person of the Year – 2017.

I had also noted my top four ministers in the Buhari Administration.

In the Igbo tradition (Nigeria), we have an axiom: when the village cooks for you, you cannot finish the food, but no matter what you cook for the village, you are sure the village will consume all. The essence of that axiom is to remind everyone that no matter your position, the community is always stronger. That is also reflected in names as the tradition puts communities above all, including the kings: parents name their children “Ezebuiro” (the king is the enemy), implying that while we honor elders and tradition, even the king cannot be stronger than the community. When a king tries to go beyond his bounds, the community will remind him that they own the kingdom. It does not mean that we do not respect kings, but our spirit of individual entrepreneurial liberty makes it clear that everyone is a king in his house (first), and the king must understand that because everyone is a king!

I have no opinion on Jerusalem/Tel Aviv as the capital of Israel or whatever [count me out]. But I have an opinion when United States UN Ambassador Nikki Haley threatened cutting off U.S. aids to any nation that votes against the U.S. By saying that, and the nations actually voting against the U.S., she has embarrassed herself, Trump and the nation she represents. The UN village had cooked for America and it was too much. That is a lesson Ms Haley would have mastered.

UN ambassador Nikki Haley warned that the US would be “taking names” of countries that voted for a resolution condemning President Donald Trump’s decision to recognize Jerusalem as the capital of Israel. Hope she has a pencil handy; she’s got a lot to write down.

The UN brushed off Haley’s threat and overwhelming approved the resolution 128 to 9, with 35 nations abstaining. Trump had threatened to cut off foreign aid to any country that voted for the resolution, and Haley said the US “will remember it when we are called upon to once again make the world’s largest contribution” to the UN. A State Department spokeswoman said the US would “explore various options” following the UN vote. (CNN Newsletter)

Leadership does not come by putting fears on subjects. It used to work when the world was unipolar with only the U.S. as the superpower. But we are in a duopolar (with China), if not a tripolar (if you include Russia) world, where if U.S. pushes countries out, they could run to China and Russia. Trump and his lieutenants are diminishing America by showing strength where it is not necessary. There was no need for the threat: it made Ms Haley looked tough, but now, she looks like a simpleton. I can assure you that if Nikki withdraws U.S. money to most of the countries that voted against U.S., the next day China will ship a truckload of money, making sure the leaders stay closer to Beijing. That outcome is not what America will like either!

Business Lesson

The threat from Ms Haley is one that even if she goes ahead to execute will not be a good outcome. If U.S. cuts all supports to countries fighting terror, America and the world in general will not be safer. This means that a threat whose outcome would even hurt you more is not a wise one. So, when the people decide not to align, and you punish them, you are not doing well to yourself: U.S. will not be better off withdrawing all funds in countries where it fights terror in Middle East, North Africa, and so on.

Team is closing for the year tomorrow (that does not affect Tekedia which will continue sharing insights all through the holiday and Christmas break. Yes, I will be here daily.) The accountants have run the numbers and they looked exceedingly great. 2017 is our best year ever in our business. Our Advisory Services business quadrupled in revenue. Zenvus broke every metric we set in multiples. And our innovation deepened across our businesses. Our Intel FPGA partnership brought huge growth in Eastern and Southern Africa. Our cybersecurity business grew 10x with licensing rights to universities and partnerships with companies.

I have also set a personal business development target for 2018: join a board of a public-traded company. I am in some private ones but I want the public one. I want to know what they discuss in those small rooms under the weight of compliance regulations. Those men and women run the world, and I want to experience it.  I have no clue how that will happen, but we have 12 months ahead.

Yes, if your firm is traded in EU/UK, U.S., South Africa and Nigeria and you need a visionary in your Board, you can make this target come live. I have the multi-threat experiences: banker, academic, entrepreneur/businessman and designer. I want to learn and also share insights that will help a firm. This would be awesome. I am waiting for your emails via the Contact Us page here.

Have a great new year ahead.

Ndubuisi Ekekwe