Apple partner Didi staring down possible $585 million loss in first half of year

Chinese ride-hailing company Didi, backed by Apple to the tune of $1 billion, has struggled to grow and is bleeding cash in China amid competition and regulatory scrutiny.

According to Bloomberg, Didi Chuxing lost 4 billion yuan ($585 million) in the year's first six months. That figure is cited from "people familiar with the matter," and not from any kind of public earnings report.

In early 2016, Apple invested $1 billion in Didi Chuxing, and the following year the company opened an artificial intelligence lab in California. This was near Apple's reputed self-driving car lab, indicating that Didi Chuxing has a part to play in the future rollout of "Project Titan."

Google parent company Alphabet, shortly afterward, invested $1 billion in Lyft.

In April 2017, Tim Cook wrote a testimonial about Didi Chuxing president Jean Liu in Time magazine's Time 100 Most Influential People issue.

"In over 400 cities across China, Jean has also built a company that is dedicated to serving the community around it," Cook wrote. "Guiding Didi to this higher purpose, and giving back to the places where it does business, she shares my belief that companies can and should measure themselves by more than just the bottom line."

Didi Chuxing's problems should be familiar to anyone who has followed the story of its American counterpart Uber. While rated the world's second-most valuable startup, the Didi Chuxing has suffered financially due to handing out $1.7 billion in subsidies and discounts to customers. Like Uber, the Didi Chuxing has spent a lot of time fighting with government entities.

The company, which has never generated a profit, and has also faced bad press due to two deaths of passengers at the hands of Didi drivers. Founder/CEO Cheng Wei has vowed to overhaul the company's culture, just as former CEO Travis Kalanick did prior to his ouster last year. Didi Chuxing actually purchased Uber's China operation for $1 billion in 2016.

12 Comments

ireland 17435 comments · 18 Years

About 6 years ago

Any women want a didi ride?

SpamSandwich 32917 comments · 19 Years

I had a feeling early on Apple would get screwed by pouring money into this Chinese company. Company accounting and activities in China are opaque to outsiders. Every company there is a shell game designed to fleece investors.

zomp 64 comments · 12 Years

This is a good and cheap study for Apple, they don't have the risks and I believe they went in knowing that they would lose a billion and weren't too worried. Rideshare is a unique business and new to the world. Uber hasn't made money at all - they are paying their bills of course, but they aren't profitable. One of the big issues is that they expect their drivers to act like employees', but then kick them off if they are selective of the rides they choose to accept. Another big problem is dealing with every local law and ordinance in the world along with commercial insurance. There isn't enough money for the driver or uber because there is no uniformity.
So, if driverless cars are used, I can say (as a former Uber X driver) that there will still be no money to be made. The cars will always need to be cleaned after every ride and the cars will be expected to drive long distances for a pickup for a passenger only driving 2 miles. Think of it, uber expects their drivers to accept a ride 10-15 miles away and not be paid for the 30 minute or longer drive time and to pick up the passenger to go to the local store only 2-3 miles away - the driver receives a whopping $3.50 and then the driver needs to drive back close to home - The driver makes less than 3.00 per hour and loses .57 cents a mile.
Point is, there is too much wear and tear on the vehicle and tons of maintenance required and especially after someone throws up, eats in the car, smokes, spills a drink, pees, and so much more - even folks who walk on mud get into your car. It's a losing business model and only the software engineers make the best money.

Latko 398 comments · 7 Years

zomp said:

This is a good and cheap study for Apple, they don't have the risks and I believe they went in knowing that they would lose a billion and weren't too worried. Rideshare is a unique business and new to the world. Uber hasn't made money at all - they are paying their bills of course, but they aren't profitable. One of the big issues is that they expect their drivers to act like employees', but then kick them off if they are selective of the rides they choose to accept. Another big problem is dealing with every local law and ordinance in the world along with commercial insurance. There isn't enough money for the driver or uber because there is no uniformity.
So, if driverless cars are used, I can say (as a former Uber X driver) that there will still be no money to be made. The cars will always need to be cleaned after every ride and the cars will be expected to drive long distances for a pickup for a passenger only driving 2 miles. Think of it, uber expects their drivers to accept a ride 10-15 miles away and not be paid for the 30 minute or longer drive time and to pick up the passenger to go to the local store only 2-3 miles away - the driver receives a whopping $3.50 and then the driver needs to drive back close to home - The driver makes less than 3.00 per hour and loses .57 cents a mile.
Point is, there is too much wear and tear on the vehicle and tons of maintenance required and especially after someone throws up, eats in the car, smokes, spills a drink, pees, and so much more - even folks who walk on mud get into your car. It's a losing business model and only the software engineers make the best money.

I get this. But did Tim ?
(look at that picture...!!)

tzeshan 2350 comments · 14 Years

The article said two deaths of passengers reportedly struck by Didi drivers. This is incorrect. Two young women riders were raped and killed by Didi drivers.