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Didi Chuxing, China's colossal ride-sharing company, is rolling out a self-driving pickup service on Chinese streets in the next few weeks — a gamble that could give the company an important edge in the global market.

Why it matters: The first company to put large numbers of self-driving cars on the road stands to gain two important advantages: reduced operating costs and real-world driving data for its algorithms, which will improve its autonomous driving systems.    

What's happening: In the first quarter of 2019, Didi delivered an estimated 21 million rides per day, compared with 15 million daily by Uber. 

In August, Didi spun out its self-driving unit, following the example of Google and  Waymo. 

The autonomous driving unit employs 200 software engineers in Mountain View, California, and in China.

Between the lines: While China has abundant labor, Didi has made an aggressive push into self-driving cars because of concerns around competition and safety. 

In wealthier city markets like Beijing and Guangzhou, labor is no longer cheap, and to win those markets, Didi must offer the lowest prices compared to Beijing-based Shouqi Chauffeur and Geely-backed CaoCao Zhuanche. Removing drivers is seen as the most direct path to lower costs.

Didi faced heavy scrutiny after two female passengers were killed by drivers in 2018. The company has 33 million drivers and cannot screen and monitor all of them effectively.

Meanwhile, Didi can afford to develop autonomous technology and expand overseas thanks to funding from heavyweight backers, including Softbank, Tencent and Alibaba. It also has partnerships with VW, Toyota, Beijing Auto, Nissan and others.

What to watch: Didi plans to push out its self-driving services to other countries rapidly, starting in 2021. 

If Didi demonstrates its self-driving capabilities on Chinese roads, it could meet that goal and see a rise in its most recent valuation of around $57 billion. 

Michael Dunne is the CEO of ZoZo Go, an investment advisory firm focusing on Asia and mobility, and the author of "American Wheels, Chinese Roads."

Didi seeks competitive edge with faster rollout of driverless pickup

The Chinese ride-hailing giant hopes to address passenger safety concerns and rising labor costs.

Illustration of a hand holding a cellphone with the Didi Chuxing ap hailing a small fleet of cars, all in the shape of the Chinese flag

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Didi Chuxing

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Didi Chuxing, China&#x27;s colossal ride-sharing company, is rolling out a self-driving pickup service on Chinese streets in the next few weeks — a gamble that could give the company an important edge in the global market.Why it matters: The first company to put large numbers of self-driving cars on the road stands to gain two important advantages: reduced operating costs and real-world driving data for its algorithms, which will improve its autonomous driving systems.

From the Valley to D.C., Big Tech players like Facebook, Google and Amazon are under more scrutiny than ever as new technology develops and privacy and antitrust concerns grow in lockstep with companies’ ambitions.

As part of the Made in China 2025 strategic initiative, China wants supremacy in key future technologies, including electric cars and autonomous vehicles.

The big picture: Waymo and other U.S. firms like Cruise and Zoox are far ahead in developing the technologies. But China could become the autonomous leader by 2025 because regulators there can pave the way for mass adoption of autonomous cars more quickly than their American counterparts. 

What's happening: Baidu is leading China's autonomous efforts but when it comes to the tech they are 3-4 years behind their counterpart Google's Waymo. To catch up, Baidu launched an open-source development program called Apollo that executives say they want to be the “Android” of autonomous vehicles.

Apollo has already attracted more than 100 partners, including blue chippers like Microsoft, Nvidia, Intel, Mercedes-Benz and NXP.

The Chinese government's friendly regulatory approach to AI enables the collection of troves of data that are crucial inputs into algorithms at the heart of autonomous technology. (The approach may also allow for greater surveillance in the country.)

China is building a brand new city near Beijing called Xiongan that will feature high-tech infrastructure that allows autonomous cars to “talk to” their surroundings and to other vehicles. Xiongan could be China’s blueprint for other key cities.

What to watch: Baidu and other Chinese AV start-ups rely heavily on advanced R&D centers in Silicon Valley, where they employ hundreds of software engineers. 

With new Committee on Foreign Investment in the United States rules, Chinese companies will likely face restrictions on investments into U.S.-based autonomous tech start-ups.  

And top software talent in Silicon Valley might feel some reluctance to join Chinese companies. 

Michael Dunne is the CEO of ZoZo Go, an investment advisory firm focusing on China and mobility, and the author of "American Wheels, Chinese Roads."

China races for global leadership in AVs

Their key advantage: Regulators can make sweeping new rules to accelerate new technologies.

Illustration of a car with stars instead of headlights

Deep Dive - Autonomous Vehicles

Business

As part of the Made in China 2025 strategic initiative, China wants supremacy in key future technologies, including electric cars and autonomous vehicles.The big picture: Waymo and other U.S. firms like Cruise and Zoox are far ahead in developing the technologies. But China could become the autonomous leader by 2025 because regulators there can pave the way for mass adoption of autonomous cars more quickly than their American counterparts.

Michael Dunne

Stories

Didi seeks competitive edge with faster rollout of driverless pickup

China races for global leadership in AVs