Didi Chuxing(Chinese Ridesharing Company) goes Mexican

(Preet) #1

Chinese ridesharing giant Didi Chuxing is preparing to expand out of China for the first time and will begin in Mexico, which gives it a perfect location to block US-based companies from going south. Didi is not foreign to North America; it opened its autonomous vehicle (AV) research and development center in Mountain View, California earlier this year. Most viewed this move as the Chinese expedition to poach top AV engineers and become a viable competitor in the global AV race. When considering the market in China, once Didi has AV technology it will corner the rideshare and AV market in its home country.

Didi's first encounter with the US came when Uber tried to take over the Chinese ridesharing market and poured around $1 billion into the Chinese market. Didi put up a strong and fierce front which eventually stopped Uber from continuing and caused Travis Kalanick, Uber's founder and CEO at the time to exchange competition with the trade. Uber and Didi agreed to exchange Uber's presence with 17% of Didi stock going to Uber and a board position for Kalanik as well as Didi buying Uber's operations in China for $1 billion. At the same time, Apple invested $1 billion in Didi.

Didi has invested in many ridesharing companies including Careem, a Middle East company, Ola in India and Grab the Singapore based company as well as Taxify from Estonia. In fact, as of today, Didi is the second largest privately-owned company, after Uber.

While some might consider Didi's expansion move to Mexico as a direct assault on US-based companies, when looking at the map of rideshare company ownership, the lines get blurred. Apart from Didi, SoftBank has holdings in many companies like Uber, as well as Grab and Ola. In fact, this is one industry where everyone has a hand in everyone else's pie, except Uber and Lyft that remain in direct competition with the US and Canada.

Didi already sat with Mexico, which is a Mexican government arm dealing with trade and investment. The meeting was a platform for discussing the possible opportunities for Didi to invest in Mexico. According to one source in Didi, they perform 20 million rides a day, and they also offer bike, bus and carpooling services too. They are at present the largest, by far, ridesharing company in China, and while they have a lot of room to continue to grow, their eyes are global.

Just to get a clearer picture of what Didi is, we created a short, concise compendium on Didi.

Didi Chuxing is a Chinese smartphone app for hiring taxis, private cars, and designated drivers. It now serves over 450 million users in over 400 Chinese cities, the services include:

  • DiDi Taxi: Didi partnered with Taxi companies, using over 2 million drivers in 400 Chinese cities.
  • DiDi Express: Cover 400 cities and over 2million carpool passengers using Didi ExpressPool option.
  • DiDi Hitch (Social Ridesharing): 2.2 million daily inter- and intra-city rides at peak.
  • Designated Driving: Is found in over 200 cities.
  • Enterprise Solution: Didi has over 170,000 corporate clients.
  • Car Rental: In January 2017, DiDi opened its overseas car rental service that provides Chinese travelers in over 1,500 cities around the world.
  • DiDi Bus: Didi serves over 500,000 bus passengers with over 1,500 rides a day in Beijing and Shenzen.
  • DiDi Minibus: This is Didi's interface with public transport, offering customers a final three-mile service from public transport stops to final destinations.
  • DiDi Select: This service provides over 1 million rides daily.
  • Bike-Sharing: Didi offer's Ofo, a bike rideshare service that is partnering with Didi's bus tracking service and will connect to the AI platform that Didi is using to map accurate usage of routes, traffic and

Didi Technology

  • Artificial Intelligence (AI): Didi's AI research center in Mountain View, California will concentrate on AI-based security and intelligent driving. It will also develop an AI dispatch and route planning system that is based on its big data platform. This will give Didi' the ability to develop a smart transportation solution, which is a comprehensive and holistic solution to human and eventual AV traffic.
  • Big data operation: DiDi's platform generates over 70TB of data daily, and processes over 20 billion routing requests, producing over 15 billion location points.
  • Cloud: The new cloud platform will integrate the big data on a cloud and create what they term "The Great Tidal" which is a traffic solution provided by the AI that enables all the vehicles using Didi's app to integrate into traffic through smart dispatch and routing.


  • August 2016: DiDi bought Uber China and bought an equity interest in Uber.
  • January 2017: DiDi invested in Brazil's 99
  • July 2017: DiDi invested in Singapore's Grab.
  • August 2017: DiDi partnered with Estonia's Taxify, which has sites all over Europe and Africa. DiDi also partnered with Careem, a company with sites in the Middle East and North Africa.


  • In June 2016, Apple, China Life Insurance Co, and Alibaba Group Holding invested in Didi to the sum of $4.5 billion.
  • They also secured a further $2.5 billion loan from China Merchants Bank Co. and a further $300 million debt from China Life.
  • In March 2017, SoftBank started moves to invest $6 billion in Didi, of which $5.5 billion will be used to advance Didi's AI research and globalization.


On April 17, 2017, an overseas subsidiary of SoftBank Group Corp. and Xiaoju Kuaizhi Inc. ("Kuaizhi"), the operator of a taxi allocation service in China, entered into an agreement whereby the overseas subsidiary will make a total investment of $5.0 billion (approximately ¥550,000 million) in Kuaizhi. Kuaizhi will not be classified as a subsidiary or an associate of the Company after the investment, continuously. The impact of this agreement on the operating results as of March 31, 2018, has not been determined at present.

Conclusions : Didi is reaching Uber in scope and will most probably surpass them since Didi's expansion is metered and based on performance, similar to Lyft, rather than a reckless global growth approach that Uber used. SoftBank is invested in every ridesharing company and AV technology developer around the world, and as such when AV becomes a viable and standard means of transportation, SoftBank will control at least 10% of the global market. So, this is one company to watch out for as well as invest in. Didi and other ridesharing companies will continue to merge and transact, and the global map is not yet complete, we expect many changes over the next few years. The ridesharing scene will continue to change as more niche markets, and countries join the action, as well as advances in traffic control AI software and autonomous vehicle (AV) research advances.

Didi Chuxing Targets Uber and the World for Ridesharing Business