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Apple Inc. is investing $1 billion in Chinese ride-sharing service Didi Chuxing, which dominates Uber Technologies Inc. in the world’s biggest market. Here are five things to know about Didi:
1. History: Didi, formally known as Xiaoju Kuaizhi Inc., traces its beginnings to 2012 and rival taxi-hailing apps that gained backing from China’s biggest Internet companies.
Didi Dache was supported by Tencent Holdings Ltd., which took part in a $100 million fundraising round in 2014. A rival service, Kuaidi Dache, also started in 2012 and attracted investment from e-commerce giant Alibaba Group Holding Ltd.
The two apps merged in February 2015, after brutal competition drove up losses, and subsequently expanded their businesses beyond calling taxis. They serve 300 million passengers in more than 400 cities.
2. Names behind it: The Beijing-based company’s chief executive officer is Cheng Wei, a former employee of Alibaba. He recruited Jean Liu from Goldman Sachs Group Inc. to be chief operating officer of Didi Dache in 2014, and she was named president in February 2015.
The board of directors include Lucy Peng, a co-founder of Alibaba who is now CEO of its finance affiliate Zhejiang Ant Small & Micro Financial Services Group Co.; and Martin Lau, president of Tencent.
In addition to Apple, its investors include DST, Tiger Global Management, SoftBank Group Corp. and Temasek Holdings Pte.
3. Scope of services: What started as a service for hailing taxis has morphed into a company that offers ride-sharing, bus hiring, chauffeur services, auto financing and test-drive services. The app completes more than 11 million rides a day — or 127 rides a second — and is the second-biggest platform for online transactions in China after Alibaba’s Taobao shopping mall.
Didi said it has 99 percent of the market for taxi-hailing apps and 87 percent of the private car-hailing services. It works with 14 million registered drivers in more than 400 cities, and it broke even in about half of those locations.
By 2018, the company wants to serve 30 million passengers a day, with a waiting time within three minutes.
4. Rivals: Didi competes with Uber in China and has started taking that fight abroad. At home, Didi dominates, with Uber saying it wants to be in at least 100 cities this year, or about a quarter of the market that Didi is operating in. Uber also attracted investments form Baidu Inc., owner of China’s most-popular search engine and is said to have been supported by China Life Insurance Co., the nation’s largest insurer.
Overseas, Didi has partnered with Lyft Inc., India’s Ola and Southeast Asia’s Grab to fight the San Francisco-based Uber.
Uber is valued at $62.5 billion. Didi’s latest fundraising round values the company at about $26 billion, according to people familiar with the matter.
5. China’s regulations: China’s national government may be seen as more friendly toward ride-hailing services than local governments, which often are trying to protect their own taxi services. Didi believes it can help China alleviate the massive traffic jams and choking air pollution that plague its cities, and the national agency that oversees taxis scrapped some regulations in March to make it easier for the ride-sharing services to do business.
In October, Shanghai gave Didi a license for private-car bookings, and the company is working with more city governments to adopt a similar model, it said at the time. Shanghai is seen as a traditional testing ground for nationwide economic policies, so other cities could follow suit.
Yet both Didi and Uber face a thicket of regulations from local authorities. Didi now is trying to ally with the startups founded by provincial and city governments, welcoming them to link their services to Didi’s app and website.
©2016 Bloomberg L.P.
This article was written by Lulu Yilun Chen from Bloomberg and was legally licensed through the NewsCred publisher network.