Apple Endorses China's Leading Ride-Hailing Firm with a $1 Billion Investment

Friday, July 15, 2016

Apple Endorses China's Leading Ride-Hailing Firm with a $1 Billion Investment

Self Driving Cars

Chinese Uber competitor, Didi Chuxing has raised billions of dollars in its latest fundraising effort, giving it a host of powerful allies including Apple. The partnership looks to push forward the development of self driving cars.

Apple's desire to enter the transportation industry has been quite apparent for some time now,
with numerous media reports suggesting that the company plans to develop autonomous driving technology and launch a driverless taxi service, even though an official confirmation for those intentions is yet to be provided.

Now, the Cupertino, California-based company has made a move that puts it a step closer to becoming a significant factor in the ride-sharing business, after making a substantial investment into one of the biggest companies in that field. Last week, Apple announced that it has decided to invest into the leading car-hailing service in China, Didi Chuxing, in a move that analysts interpret as Apple's attempt to boost its driverless vehicle research efforts.

China's Unchallenged Ride-Hailing Service

Apple said that it will invest $1 billion in Didi Chuxing, a strategic move that is not very typical of the tech giant, as it is not known as for spending a lot of money on buying other companies. But, there are a few very good reasons behind this decision. First of all, Didi is the largest player in China's ride-sharing market, which is undergoing a major expansion. It is the only company that is preventing Uber from establishing dominance in the ride-hailing business in the world's most populous country, claiming to have a 90% share of the market, providing over 11 million rides per day, with 300 million users across 400 cities. This means that Apple might gain a substantial financial benefit from this investment.

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Besides that, this investment is also part of Apple's bid to gain more trust with Chinese authorities, with authorities imposing stricter and more frequent controls over how the way the company has been doing business there, closing some of its stores around the country, in line with their intentions to favor domestic companies at the expense of foreign businesses.

By buying a stake in a Chinese company, Apple wants to show that it is willing to be a contributor to the county's economy, rather than just taking advantage of China's growing middle class consumerism.

Tim Cook and Didi Chuxing's Jean Liu
Tim Cook and Didi Chuxing's Jean Liu

“Didi exemplifies the innovation taking place in the iOS developer community in China,” Tim Cook, chief executive of Apple, said in a statement. “We are extremely impressed by the business they’ve built and their excellent leadership team, and we look forward to supporting them as they grow.”

Apple's Car Project

On top of expanding its businesses and exploring opportunities for new revenue streams in China, along with improving its relations with local authorities, Apple's investment into Didi Chuxing is also an attempt to ramp up its driverless car program. The ride-hailing business is widely regarded as the best way to bring self-driving vehicles to the road while this novel technology is still in its infancy, and Didi Chuxing can be of great help to Apple in this regard.

Chinese authorities have been pretty busy creating the necessary conditions to attract automakers and tech companies to test autonomous cars on the country's roads lately, so Apple's collaboration with a company that operates a large fleet of taxis and has hundreds of millions of users in most of the largest cities in China will make it easier for the Californian tech giant to overcome all potential regulatory and technical obstacles and start testing self-driving vehicles as soon as possible.

By Jordan PerchEmbed

Author Bio - Jordan Perch is an automotive fanatic and “safe driving” specialist. He is a writer for, which is a collaborative community designed to help ease the stress and annoyance of “dealing with the DMV.”


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