For those unfamiliar with the name, Didi Chuxing is a ride-sharing company that provides transportation for almost 400 million users across 400 cities in China. Their services include taxi hailing, private car hailing and numerous other service all via a smartphone app. The company was the result of a merger between Didi Dache and Kuaidi Dache. Think of them as the Uber of China.
In fact, Didi secured their place as China’s principle ride-sharing platform following CEO Cheng Wei negotiated a deal to acquire Uber’s China unit in August 2016. The result of this? Didi Chuxing was estimated to be worth a whopping US$35 Billion. If that wasn’t enough, the company also has Alibaba, Tencent and Baidu as their primary investors.
So What’s Next For Didi Chuxing?
Well, they are currently in agreements to raise an additional US$5 billion. This would essentially make the company the most valuable startup in China. In addition, this would further bolster the net worth of Didi Chuxing to approximately US$50 billion. Just to put things into perspective, the company would be more valued than Xiaomi Corp. In addition to Alibaba, Tencent and Baidu, Didi Chuxing’s investors also include SoftBank Group Corp., Silver Lake Kraftwerk, and China Merchants Bank Co. among a few others.
While the company has providing ride-hailing services for the Chinese market for the last 4 years, one of the goals of the company is to expand into other countries. Furthermore, Didi Chuxing has also shown interest in technologies such as autonomous driving coupled with artificial intelligence (AI). If their plans work out, this would put Didi Chuxing in direct competition with the likes of Uber and even Alphabet and their smart cars. To that extent, the company has opened up an AI laboratory in Mountain View, California called Didi Labs in March. The laboratory has already attracted the attention of individuals such as Charlie Miller, who spent 5 years working at the National Security Agency and also worked at Uber as an auto-security expert. In addition, he was also known remotely hacking into a 2014 Jeep Cherokee and proceeded to control the braking, steering and acceleration of the vehicle.
A Challenging Road Ahead
There are a number of challenges faced by Cheng though. For example, with Beijing and Shanghai’s rather tight regulations, potential drivers have to be local residents. This means that in order to be a driver for Didi Chuxing, you’ll only be able to operate and drive passengers in your local area. This makes it difficult for those living in the countryside who want to come into the city to make a living. As a consolation, Didi Chuxing has successfully obtained a number of operating licenses in a number of cities such as Tianjin and Chengdu thus allowing them to legally operate in China.