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Volkswagen, Didi in talks on ride-hailing joint venture

ABR Staff Writer Published 01 May 2018

German automaker Volkswagen and ride-hailing company Didi Chuxing are in talks to partner for a joint mobility venture in China.

As part of the deal, Volkswagen could be managing a fleet of about 100,000 new vehicles for Didi, out of which two-thirds are expected to be from the automaker.

Volkswagen will also buy some cars with Didi Chuxing to expand the Chinese fleet.

The plans could lead to the development of dedicated or self-driving cars that will be added to Didi’s fleet, Reuters reported.

A senior executive at the carmaker was quoted by Reuters as saying that this deal will eventually give Volkswagen access to some of Didi’s massive trove of data on customer behavior collected through the 30 million rides Didi provides in China each day. This data will be used by Volkswagen in the development and use of autonomous vehicles.

The executive also reportedly stated that the vehicles in question may not need high performance and there is also no need for four seats, as most Didi’s customers ride alone. So, the plan could translate into smaller engine spacing and increased luggage capacity.

Didi and Volkswagen are working on the details related to the partnership and the companies are reportedly not sure about how the final partnership could look like.

As part of the partnership, potentially, the two companies could work on building a fleet operation, which could probably include the development of new vehicles and models dedicated for ride-hailing operations.

Didi is also working with Chinese automakers such as GAC Motor and CHJ Automotive to supply it with plug-in hybrid and fully electric vehicles.

In the recent past, several automakers have started investing in ride-hailing businesses. General Motors had acquired stake in ride-hailing businesses such as Lyft and SideCar. In Europe, recently Daimler and BMW combined their mobility businesses.

As per Daimler and BMW’s agreement, operations in areas including multimodal and on-demand mobility, carsharing, ride-hailing, parking, and charging.

Their joint venture had combined multimodal and on-demand mobility with moovel and ReachNow; CarSharing with Car2Go and DriveNow; Ride-Hailing with mytaxi, Chauffeur Privé, Clever Taxi and Beat; Parking with ParkNow and Parkmobile Group/Parkmobile; Charging with ChargeNow and Digital Charging Solutions.

Japan’s SoftBank Group is planning to invest about $20bn in top ride-hailing companies around the world including Uber, Didi Chuxing, Grab and Ola.

Image: Volkswagen in talks with Didi Chuxing on ride-hailing partnership. Photo: Courtesy of Didi Chuxing.