Apple made a huge investment of $1 billion in Chinese ride-hailing service Didi Chuxing, and the president of the company believes it was like “speed dating.”
Laughing, Jean Liu told CNBC, “This [partnership] is still in a very preliminary stage. We got to know the Apple team, they got to know us not too long ago, but we clicked very quickly.”
What do Apple and Didi Chuxing have in common?
Liu believes the partnership announced earlier this week makes sense for both companies as they have a lot of common ground to share. She added that both companies are in the mobile Internet space.
David Einhorn's Greenlight Capital funds were up 11.9% for 2021, compared to the S&P 500's 28.7% return. Since its inception in May 1996, Greenlight has returned 1,882.6% cumulatively and 12.3% net on an annualized basis. Q4 2021 hedge fund letters, conferences and more The fund was up 18.6% for the fourth quarter, with almost all Read More
“So how do we serve our passengers, our drivers better? How do they [Apple] serve their users better? This is already a common ground.”
She added that the two companies share a huge overlap in their customer bases, and what makes the partnership intuitive is the fact that Didi Chuxing passengers and drivers use Apple’s iPhones and iPads. Liu refused to comment on specific areas of collaboration such as car technology or Apple Pay but said the possibility exists for a lot of things to happen.
CHECK OUR LIVE COVERAGE: The disappearance EgyptAir Flight MS804
The company is registered with the name Xiaoju, meaning “little orange;” therefore, it refers to its employees as “oranges.” Reports say that Liu met Apple CEO Tim Cook last month and that a company named after a fruit could achieve something big.
Massive potential in China
Didi Chuxing was born last year from a strategic merger between taxi-hailing apps Didi Dache and Kuaidi Dache, and its name translates to “Beep-beep! Mobility.” Didi not only offers private ride sharing and taxis but also services for carpooling, buses, chauffeurs and corporate transport options as well.
Didi Chuxing witnessed massive growth in its first year. The service is present in 400 Chinese cities, and it completes 11 million rides on a daily basis, which is just a fraction of China’s ride market, said Liu. The number of rides it completes in Beijing in a day is 5-6 times the whole of New York’s ride-sharing market, she added.
So while the numbers sound big, they are merely a 1% penetration in China’s market. In China, the number of daily commutes goes up to 1.1 billion, and thus, 1% penetration gives just 11 million rides to the company. Considering the size of the market, Liu is focused on ensuring better supply and demand between vehicles, passengers and drivers.