A model for an auto show in Taiyuan, Shanxi province, uses the Didi Chuxing car-hailing service to commute from her college to the auto show. [Photo/China Daily]

US-based ride-hailing service Uber Technologies Inc would merge its China business with rival Didi Chuxing, valuing the combined company at $35 billion, according to bloomberg.com, citing people familiar with the matter.

Didi is making a $1 billion investment in Uber at a $68 billion valuation, said the unnamed source.

A Chinese mobile phone user uses the taxi-hailing and car-service app Didi Chuxing on his smartphone in Jinan city, East China's Shandong province, Feb 22, 2015.[Photo/IC]

Investors in Uber China, which is owned by San Francisco-based Uber, Baidu Inc and others, would receive a 20 percent stake in the combined company, said the report.

According to a blog post cited by Bloomberg, Travis Kalanick, chief executive officer of Uber, said: "Uber and Didi Chuxing are investing billions of dollars in China and both companies have yet to turn a profit there. Getting to profitability is the only way to build a sustainable business that can best serve Chinese riders, drivers and cities over the long term."

Travis Kalanick, CEO of Uber, speaks at the Annual Meeting of the New Champions 2016 during the World Economic Forum 2016 Summer Davos in Tianjin, June 26, 2016.[Photo/IC]

The authenticity of the blog has not been confirmed by the company.

Both of the companies could not be immediately reached for comment.

A Chinese mobile phone user uses the taxi-hailing and car-service app Didi Chuxing on his smartphone in Jinan city, East China's Shandong province, Feb 22, 2015.[Photo/IC]

Last week, a long-awaited regulation giving legal status to online car-hailing services in China was approved and released by the nation's State Council.

Aimed at regulating the taxi market and car-hailing services in China, the regulation requires car-hailing platforms, such as Didi Chuxing and Uber Technologies, to review the qualifications of drivers and their cars to guarantee safe rides.

In last February, Didi Dache and Kuaidi Dache, the precursors of the Didi Chuxing, jointly announced their strategic merger, becoming one of the largest vendors in the market.