Didi Chuxing president hints at tech link for Apple's $1 billion investment
In a TV interview, Didi Chuxing president Jean Liu dropped more hints about the possible reasons for Apple's $1 billion investment, suggesting a technological connection.
"We actually share a huge overlap in customer base," Liu told CNBC. "Our driver base, our passengers, they use Apple and iPhone a lot, iPad, I think it's very intuitive."
The executive pointed out that the potential scale of the Chinese ridesharing market is much larger than the U.S., claiming her company has only a 1 percent penetration of about 1.1 billion daily Chinese commutes. The number of rides Didi provides in Beijing every day is five or six times the entire New York ridesharing market, she said. Along those lines, Liu suggested that technology is a solution.
"All we are focused [on] right now is number one, on technology," she said, "how we can match the supply and demand, i.e. the vehicles, the drivers, with the passengers."
Apple could be hoping to fill the gap, though there are number potential ways this might happen. On a basic level Apple might offer to integrate its devices, software, and/or services, such as Apple Maps. The company is also believed to be developing an electric car, however, which could become self-driving. Selling such vehicles into the Didi fleet might be lucrative.
When Apple's investment was first revealed, Apple CEO Tim Cook said only that it was made "for a number of strategic reasons," such as "a chance to learn more about certain segments of the China market." He later added that Didi had an "environmental" objective, reducing pollution by making more efficient use of cars.
"We actually share a huge overlap in customer base," Liu told CNBC. "Our driver base, our passengers, they use Apple and iPhone a lot, iPad, I think it's very intuitive."
The executive pointed out that the potential scale of the Chinese ridesharing market is much larger than the U.S., claiming her company has only a 1 percent penetration of about 1.1 billion daily Chinese commutes. The number of rides Didi provides in Beijing every day is five or six times the entire New York ridesharing market, she said. Along those lines, Liu suggested that technology is a solution.
"All we are focused [on] right now is number one, on technology," she said, "how we can match the supply and demand, i.e. the vehicles, the drivers, with the passengers."
Apple could be hoping to fill the gap, though there are number potential ways this might happen. On a basic level Apple might offer to integrate its devices, software, and/or services, such as Apple Maps. The company is also believed to be developing an electric car, however, which could become self-driving. Selling such vehicles into the Didi fleet might be lucrative.
When Apple's investment was first revealed, Apple CEO Tim Cook said only that it was made "for a number of strategic reasons," such as "a chance to learn more about certain segments of the China market." He later added that Didi had an "environmental" objective, reducing pollution by making more efficient use of cars.
Comments
This may seem obvious to some but I remember seeing a video about the history of Nokia and their own employees had a lack of confidence in the company when Microsoft acquired them for 7 billion, something Apple would have avoided.
This investment has HUGE marketing and innovation potential and like the president said, they're just getting started. 5x the New York rideshare market is huge and something even Uber didn't see coming.
Oh but "Apple isn't doing anything", they "aren't innovating anymore" because they don't tell us what they're up to!!!11
I wouldn't say Apple got in on the ground floor, but they definitely got in to an express car on this one, if the Chinese economy holds.
Furthermore, I think Apple's investment is not really about cars or technology or creating a market for whatever car Apple produces, if indeed they do so. IMO, I think this is probably mostly political. It's about making a big investment in a Chinese company in order to get the Chinese government off of Apple's back using cash they don't want to bring back to the U.S. anyway because of the tax implications.
I tend agree. However--- Im a bit confused, is this a true 'ride-share' or is this a Uber type thing. My Negative Nellie view of 'Uber et el'--- all they do (in theory) is compete on price with Taxi services and possible convenience. Still a 'car' on the road. If gasoline, still polluting.
IMO true 'ride-sharing' - Hey Im going to the Mall, any one want to come along and share costs?... that would be different!
And who knows, perhaps provide an out of the box software solution for iPhone owners as part of some future major OS update: a default iOS app and service capable of ordering cars, billing customers and paying drivers.
Potentially selling cars into the Didi fleet is the wrong way to look at this investment. I see it as a potential software partnership and areas of huge amounts of invaluable market information.
Sounds to me that the technology they are focused on is a service: timely matching of customers to available rides at scale.
Here's the current scale:
Potential 1,100,000,000 trips/day.
Looking at this from a database/transaction-processing perspective:
Each trip consists of 3* transactions:
- schedule
- pickup
- deliver
* there are some number of failed (cancels or no-show) trips that consist of a schedule and a cancel transaction. These are not included in the analysis.So, that equals 33,000,000 trip transactions per day.
Using the 80/20 rule**: a peak of 26,400,000 trip transactions in 4.8 hours == 5,500,000 trip transactions/hour == 1,528 trip transactions per second.
** I am not too sure if the 80/20 rule applies ... I understand that China, with few exceptions, has a single time zone -- so I don't understand peak commute hours in China.
If we look at the potential and scale that by 100 it would be 152,800 trip transactions per second.
Where can we find a database capable of massive size and of processing that many transactions per second???
Well, I'll tell you where: Apple!
Last year Apple acquired FoundationDB -- a performant, scalable, transactional distributed NoSQL database.
The FoundationDB site was taken down after the acquisition, but some information remains on the web, like this:
http://thenewstack.io/databases-high-volume-transactions-scale-part-two/
According to the video:
Here's the current scale:
Potential 1,100,000,000 trips/day.