Didi Chuxing: A Glimpse of City Transportation's Future

Earlier this month, Apple announced that it had made a peculiar and unexpected move: investing $1 billion in Didi Chuxing, the Chinese ride-hailing service.

- Benjamin Kerry & Gavin Lenaghan

Apple CEO Tim Cook was vague about the rationale behind his company pouring such a significant amount of its cash pile into Didi, though he cited “a number of strategic reasons, including a chance to learn more about certain segments of the China market”. This invites considerable speculation...

That the lucrative deal was revealed only 22 days after initial talks commenced suggests that Apple and Didi were especially eager about collaborating with each other. Indeed, Didi President Jean Liu told Bloomberg that Cook is “an amazing, iconic leader”, adding: “It feels very natural to work with Apple together because philosophically on a company level we share a lot in common”. So, what should each company stand to gain from the partnership?

APPLE FURTHERS ITS REACH IN THE AUTOMOTIVE SECTOR

Didi Chuxing is, by a significant margin, the leader of China’s private car-hailing market. According to the firm itself, it completes over 11 million rides daily and holds over 87% of a market in which it aggressively competes with the better-known – on US shores – online transportation network firm Uber. Apple’s investment will doubtless help Didi to fend off Uber’s challenge, which has so far drained Didi of billions of pounds.

While Apple’s move should help it to diversify its own business that, in recent years, has become heavily reliant on the iPhone, it’s difficult to assess Apple’s strategy without keeping in mind