Didi Chuxing App (Photo : Twitter)
Apple has announced it is making a big investment in a Chinese taxi service that competes with the ride-sharing company Uber. The manufacturer of iPhones and iPads is investing $1 billion in China's biggest taxi-hailing app Didi Chuxing that is reportedly five times bigger than Uber in the country.
Rakers believes Apple's investment in Didi could be the first of several transactions of the tech giant to secure minority stakes in Chinese mobile products and services, according to ABC News. That is due to their audience and revenue.
Last year Apple posted its first-ever drop in quarterly revenue. The company is investing more in China's market including its purchase of an estimated 4 percent of Didi Chuxing.
Apple's stake in Didi also benefits the Chinese company as it battles the United States-based ride-sharing company Uber. Didi reports it is the biggest investment it has received. Other investors include Chinese tech companies Alibaba and Tencent.
Hours after the news of Apple's $1 billion investment in Didi Chuxing broke, Uber CEO Travis Kalanick responded with a tweet. He shared that his girlfriend owns Apple shares so she is indirectly an investor in Didi, according to The Verge.
A few months ago Kalanick admitted that Uber was spending about a $1 billion a year to expand its business in China. However, he later reported that the company was also earning $1 billion in its top 30 cities. Due to the company's global earnings it is able to keep investing in China.
It is possible Apple's investment in Didi could be a step to build a rival to Chinese messaging service WeChat developed by Tencent.
Didi Chuxing provides several ride-sharing services. They include carpooling, taxi hailing, and bus sharing. The company reports it has 14 million registered drivers in over 400 cities in China. It also has 300 million passengers.
The word "chuxing" means "commute" in Chinese. Meanwhile, "kuaidi" in the company's previous name combines the Chinese characters used for "taxi" and quick."
Cheng Wei is Didi's founder and CEO. He said in a statement that Apple's investment in his company inspires the 4-year-old company. Didi Chuxing will work hard to deal with issues in Chinese cities such as transportation and environment.
Here's a report on China's ride-sharing market:
