The world’s most valuable company has finally placed a bet on the global ride-hailing wars—and it’s not for Uber.
Didi Chuxing, the Beijing-based ride-hailing firm that rivals Uber in China (also referred to as Didi Kuaidi), announced it has received a strategic investment of $1 billion from Apple.
“We are making the investment for a number of strategic reasons, including a chance to learn more about certain segments of the China market,” Apple CEO Tim Cook told Reuters. “Of course, we believe it will deliver a strong return for our invested capital over time as well.”
In a conference call, Didi president Jean Liu said that Apple’s investment comes as part of an ongoing funding round for Didi that has yet to close. The deal was finalized at “lightning speed,” she says. Liu met Cook for the first time less than a month ago, in Cupertino, California.
The investment presents numerous opportunities for collaboration between the two companies. Apple rolled out Apple Pay in China earlier this year, so it’s possible that the service will be placed in Didi’s app. Apple is also believed to be working on an autonomous vehicle of its own, so it’s possible the companies will work together to bring it to market. When asked about what specific new features or projects the investment would bring, Liu remained elusive.
“Tencent and Alibaba have been great supporters of Didi,” she said. “On payments and maps, in the future there will be more partnerships going forward. With Apple we are confident that with data science and technology the company will be pushed to a new level.”
The deal also marks Apple’s first official bet on a ride-hailing company. Didi is a member of an “anti-Uber alliance” that includes Lyft in the US, Grab in Southeast Asia, and Ola in India, as well as carmaker General Motors. It’s not unreasonable to speculate that Apple’s support will extend to these companies as well.
Apple’s funding also comes just as the company faces new challenges in China. iPhone sales in the country are not as stunning as they once were, and the government recently forced it to shut down its iBooks and iTunes services in China.
The investment marks a hurdle for Uber, which has not been as successful in China as it has in most other parts in the world. CEO Travis Kalanick has admitted to burning $1 billion a year in China, and while reliable data is scarce, reports indicate that Didi occupies somewhere between 70% to 90% of the ride-hailing market in China. Apple’s investment in Didi certainly won’t help Uber’s position.