China’s ridesharing giant DiDi picks Melbourne as Western market launch

The Chinese ridesharing giant Didi Chuxing (DiDi), which famously absorbed Uber in China after a ferocious pricing battle, has finally announced the first Western market where it will operate.

Melbourne, Australia will have the pleasure of welcoming the ridesharing company from 25-Jun-2018, when DiDi launches DiDi Express.

This launch will be first for DiDi in a Western market, where US brands such as Uber dominate. Didi executive director of strategy Dillon Ye will also take on the role of Head of Australia and New Zealand, and in an interview with Reuters he said: “I think overall penetration rates for ridesharing versus overall transportation is still low so the market has great potential”.

The Australian ridesharing industry is currently dominated by Uber, but recent entrants to the marketplace – including India’s Ola and Europe’s Taxify – are beginning to capture market share. The obvious question here is what impact another competitor will have on the market, and whether DiDi will be able to capture enough of the market to sustain their presence and ultimate goal of expansion to the rest of Australia.

“In Australia we’re making a long-term commitment to the market and hiring local talent to build a team that can leverage local know-how to customise our tech solutions”, continued Mr Ye.

In 2016 DiDi, absorbed Uber’s China division in a deal that created a single, dominant ridesharing company valued at USD35 billion. It is doubtful that the same impact, or anything even close, will happen in Australia, which is a mature market that lends itself more towards the US brands.

DiDi has previously launched outside China within the past few months, including in Brazil and Mexico, however it has never faced competition such as Melbourne will provide.

The organisation is famous for being competitive, and will be offering riders a 50% discount at the launch, capped at AUD10 per trip and a maximum of two trips a day. Drivers who register before the 25-Jun-2018 launch date will also get an AUD200 bonus after completing 20 trips in seven days.

What makes DiDi different?

DiDi invests in local areas to build smart transportation. In Apr-2018 DiDi signed a cooperation framework agreement with the Beijing Capital International Airport Public Security Bureau, to share its big data capabilities and algorithm model. The idea is to provide real-time improvements to the traffic lights time allocation system within the jurisdictions of the airport traffic police detachment, with the aim of delivering smarter traffic light operations.

Previous joint efforts have already delivered improved traffic lights at more than 30 intersections, resulting in a decrease in traffic delays at multiple intersections and a 20% reduction in delays within the Beijing Capital International Airport area during evening rush hour. It is this form of investment and time that could greatly assist cities such as Melbourne, and could cement DiDi in the market.