Uber, after throwing a few billion dollars at China and not making much headway, is now throwing in the towel and selling out to rival Didi Chuxing. As somebody who wrote a column from Beijing a few weeks ago headlined, "Uber isn't going to conquer the world", I'd crow about this - except that I'm not sure Uber's decision really backs up my argument.

The argument was that the business of ride-hailing is one of individual cities. In a city (metropolitan area, really), the market leader can rely on the "network effects" that make a service more valuable as more people use it to establish a near-inviolable competitive position. On a national or global basis, not so much. As Professor Arun Sundararajan of New York University's Stern School of Business said: "These markets are contestable, and they're contestable city-by-city. There are network effects that are local to a particular market, but these are not like Facebook's network effects. They don't give you a multi-year advantage."

But in China, Uber apparently decided that Didi's national advantage was insurmountable - leaving the Chinese company, in which Uber will now be an investor, with a national monopoly on ride-hailing. It's possible that Chinese anti-trust regulators will have something to say about this, but this quote from Bloomberg's story about the deal makes me suspect they won't.

Mr Deng Zhisong, senior partner at Beijing-based law firm Dentons, said: "The Ministry of Commerce has to define the size of the market and see if the car-hailing business Didi and Uber are offering can be replaced by similar services.

"If you count taxi services and public transportation, the car-hailing sector will not have a market share that significant."

Well, yeah, except that Didi already utterly dominates the online hailing of taxis (as distinct from private cars) in China. Regulators allowed that market to go from duopoly to monopoly last year when rivals Kuadi Dache and Didi Dache merged.

This could be a reason China's ride-hailing market isn't a template for the rest of the world: Anti-trust law works differently there, especially when home-grown companies are involved. Another is that Didi was a uniquely rich and well-connected rival, backed by China's two biggest Internet companies, Tencent and Alibaba - and, since May, Apple.

Then again, with Uber no longer haemorrhaging money in China and CEO Travis Kalanick no longer spending 70 days a year there, the company may be able to focus on building national monopolies elsewhere. The questions are: Can it, and does it even want to?

At home in the United States, Uber is certainly well ahead of chief rival Lyft - in fund-raising as well as market share. Its advantage is especially big among business travellers, who value its presence in more cities - for them, the network effects are at least partially national. But business travellers are a small minority among those who use ride-hailing apps, and Lyft has claimed major market share gains in a few big cities where it has concentrated its efforts recently.

Lyft has been able to do that in large part thanks to US$1 billion (S$1.35 billion) in new cash it got this year from General Motors and other investors. It has also been part of a nascent global anti-Uber alliance with Didi, which invested US$100 million in Lyft last year. With Uber and Didi's CEOs sitting on each other's boards, as Monday's deal calls for, it's hard to see Didi staying involved with that effort. Also, Uber's stake in Didi will make it an indirect part owner of Lyft, at least for a while. It's all very incestuous.

It also seems to bespeak a less directly competitive future. Uber has reasons not to want to wipe out the No. 2: Lyft has been a useful ally in battles with regulators and taxi drivers in US cities, and its continued existence makes it less likely that Uber will come under scrutiny from anti-trust regulators. But Uber has far greater resources than Lyft or any other competitor in the US, and it has just stopped squandering them in China.

It may be beatable in this city or that, but not everywhere.

BLOOMBERG VIEW