Apple's $1b investment in Didi a safe bet, says expert

Apple CEO Tim Cook takes a taxi hailed via Didi with Jean Liu Qing, president of Didi, to an Apple store in Wangfujing in downtown Beijing on May 16, 2016. Cook's visit follows Apple's investment of $1 billion in the Chinese ride-hailing service. [Provided to chinadaily.com.cn]

Apple's $1 billion investment in China's ride-hailing platform Didi Chuxing is a "safe bet", as the latter will likely remain the country's dominant player, said an expert of Organization for Economic Co-operation and Development's (OECD) think tank.

By leveraging taxis and providing services ranging from peer-to-peer car pool to bus commute, Didi is offering a spectrum of mobility choices that take time to build, said Philippe Crist, economist of the International Transport Forum (ITF), an intergovernmental organization for transport policies.

"The prospect for ride-hailing sector is bright," said Crist, on the sideline of the ITF's annual summit in Leipzig, Germany, on Wednesday, adding that Apple's $1 billion investment is perceived as part of the layout for its own mobility technology or service businesses in the future.

The technology company broke the news on the cusp of CEO Tim Cook's latest visit to China. According to Didi, the platform handles over 11 million rides per day and serves 300 million users.

The move also comes as rival players announced alliance with auto giant such as Lyft with GM. Uber and Tesla were also reported earlier to consider potential partnership.

"As the technology part is not difficult to replicate, market success for ride-hailing apps comes from rapid scale and taking oxygen from the competitors," said Crist in response to the ongoing price war.

Special regulation needed

The lack of information on drivers warrants special regulatory treatment for ride-hailing, but   innovation should also be protected, said the ITF urban mobility expert.

New technology and better data have enabled targeted regulation delivery, noted the think tank in its latest report on the subject. "Automated fare data collection for tax purposes as well as on-board monitoring of vehicle condition and driver behaviors allow better oversight," he said.

Regulators should keep the regulatory framework simple and uniform, while lightening market entry control and fares guideline for taxies, according to the report.

"One of the key concerns for Chinese regulators is how they at a minimum don't make the city a worse place to live, and at maximum make it actually better," said Crist, the report's leading researcher.

With accessible public transportation and ride-sharing services, families may have less need to own a car, he added.

The ITF at the OECD has 57 member countries including China and organizes the annual summit of transport ministers.

This year's summit, under the theme green and inclusive transport, has attracted more than 1,000 policymakers as well as industry professionals from 71 countries.