Earlier this month the ride-sharing world faced its first major shakeup when Uber announced that it would sell its China business to primary competitor Didi for an ownership stake of 18% in the combined China entity, valued at $35 billion, with Didi also buying a $1 billion stake in Uber.

While some may focus on the terms of the deal, the crux is that Uber was in a no-win situation in probably the largest ride-sharing market in the world, and now it can maintain a stake in that market without the continued financial bleeding it was experiencing ($1 billion in losses per year is nothing to sneeze at when you’re prepping for an initial public offering).

Factor in the new regulations Uber was facing coming from the Chinese government that would tilt the scales even further into Didi’s favor, and Uber and its investors are probably more than a little relieved to become passive participants in China—even if it does bruise the ego a bit.

Unlike Uber, Didi has been playing out a different global strategy—one of consortium building where products from each member interoperate so that travelers can avail ride sharing across the globe with a native country app, payment, and credentials. Didi seems to be addressing other markets by forming alliances through investments — and has significant investments in all major ride sharing companies: Grab, Ola, Lyft and now Uber!

After its experience in China, Uber too may decide that alliances are a better strategy. Or not. The big question that surfaces is aboutUber’s continued rapid growth. Where does Uber go from here, given that it has indicated in the past that international markets are its growth engines?

With Didi’s alliance with Ola in India, another massive ride sharing market, the next international battleground looks like India.

On to India!

India reflects many similarities, as well as some differences, with what Uber faced in China.

Ola, the country’s undisputed leader, is still ahead of Uber in terms of market share, primarily because it is serving more cities in India and, early on, allowed cash payment, which is generally the preferred tender in India.

Uber responded to this and now also accepts cash and expanding its presence. In addition, Uber stoked the competition by giving drivers incentives to join Uber (though these incentives have been recently reduced).

As the competition heats up, I predict Uber will battle Ola just as fiercely as it did Didi, and this will come with significant costs to both companies.

But, unlike Didi, Ola is not as well capitalized as Uber; it may have a harder time staving off Uber in India. This gives Uber a small window in which it can establish a decent business that could eventually be profitable.

Aside from any one competitor, there is another very distinct hurdle for Uber to conquer in the form of regulatory issues. Uber has faced regulatory issues in the U.S. and China but nothing like they’ve seen in India. While Indian regulators are probably less nationalistic than China’s, India being a democracy, clarity on regulations may actually take longer.

For example, regulators in India’s capital city, Delhi, require taxi services to use compressed natural gas (CNG) instead of petrol. If Uber and Ola are deemed to be taxi services (currently under debate) from a regulatory standpoint, the p2p part of ride sharing growth for both may be limited in certain important Indian cities.

So how will the ride sharing battle in India ultimately play out?

If Uber decides to apply the same dominance strategy in India that it initially used in China, the companies will continue to aggressively compete indefinitely albeit with better prospects of Uber becoming eventually profitable in India than it had in China, or Uber may even make a move to acquire Ola – though anti-trust regulators in India would probably balk at that.

Alternatively, Uber could proactively opt to sell its India operations to Ola, take a large stake in the company, and still participate in the India market via the “Ola proxy” without all of the regulatory headaches and months of financial losses.

This may not be Uber’s preferred style, but after learning some difficult lessons in China, and with mounting pressure to go public, anything is possible.

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After China, India looms as Uber’s next battleground