In a sign that China’s war on tech is finally over, ride-sharing service Didi is once again free to accept new signups.
China has been waging war on tech companies in an effort to reign them in. As part of the crackdown, Beijing banned Didi from app stores and investigated its handling of customer data, according to CNN. The investigation was launched just days after Didi went public, wiping out tens of billions from the company’s value.
Roughly a week after a Chinese official declared the tech crackdown “basically” over, Didi is once again free to conduct its business.
“For more than a year, our company has cooperated with the government’s cybersecurity review, seriously dealt with the security issues found in the review, and carried out a comprehensive rectification,” Didi said in a statement posted on its Weibo account, via CNN.
“Our view is that the commercialization of autonomous driving for passenger vehicles will probably take a bit longer than people would think,” says Richard Zhang, CFO of Full Truck Alliance. “We think the commercialization of autonomous driving for trucks will probably take place a lot sooner than it will take place in the passenger car vehicle sector.”
Full Truck Alliance is a multi-billion dollarvalued company that is becoming the Uber of trucks throughout China. The fragmentation of the trucking industry in China between independent truckers and shippers has resulted in an empty load rate of over 40 percent, about four times higher than in the United States. The Full Truck Alliance app and online platform connects shippers to truckers in real-time enabling huge reductions in empty loads.
Richard Zhang, CFO of Full Truck Alliance based in China, discussed the company’s future in an interview on CNBC International TV this morning:
Full Truck Alliance in China is the Uber for Trucks
The problem we’re trying to solve is very simple because there are high inefficiencies between matching with the truck drivers and also matching with the shippers. The empty load rate in the US is only ten percent while the empty load rate in China is 40 percent. The empty load rate is very similar to the vacancy rate in the hotel business. The reason is that the market here is highly fragmented. You have highly fragmented truck drivers and highly fragmented shippers, lots of SMEs.
Before we came into existence the matching between the truck drivers and shippers were taking place across a thousand offline marketplaces in China. What we have been trying to do is bring that offline marketplace online and use our algorithms in the back office to match automatically the truck drivers and the shippers. We are trying to reduce that empty load rate to well below 40 percent.
Monetization Via Membership and Uber-Like Fees
Our monetization strategy for Full Truck Alliance is as a product of a merger between two companies, Truck Alliance and also Yunmanman a little over a year ago. Post-merger we started monetization and the monetization takes place in two ways. Number one is we are charging a membership fee for the shippers and also very similar to Uber or DiDi we’re charging a take rate on the transactions themselves.
We were very close to achieving our 2018 profit objective. We are actually very marginally close to break-even at the current moment and we have no doubt that we’re going be making earnings in 2019.
Autonomous Driving for Trucks Will Happen First
Our view is that the commercialization of autonomous driving for passenger vehicles will probably take a bit longer than people would think. We think the commercialization of autonomous driving for trucks will probably take place a lot sooner than it will take place in the passenger car vehicle sector. Therefore we are deploying a certain amount of resources into that sector in the form of investment.
We have decided to be a strategic investor in an autonomous driving truck company for them to actually develop that technology and for us to actually use. The mandate for the partner is to actually put a fleet on the road in China to start working with our shippers in the next 12 to 24 months. That’s our mandate and so it depends on how successful they’re going to be at executing our strategy.
DiDi will be one of the frontrunners in autonomous vehicle technology development says Henry Liu, VP and Chief Scientist for DiDi Smart Transportation Initiatives. Liu says DiDi is unique in that it is not just an Internet company and not just an AI company but also is a transportation company.
The CEO of DiDi has long had a high-level focus on autonomous driving technology. “Autonomous driving and artificial intelligence are the future of mobility,” noted Cheng Wei, Founder, and CEO of DiDi. “Vehicles might be the first generation of robots with massive AI technology application.”
Henry Liu, VP and Chief Scientist for DiDi Smart Transportation Initiatives, discussed DiDi’s extensive focus on autonomous vehicles in an interview on CNBC International:
We Are a Frontrunner in Autonomous Vehicle Technology
We have developed this autonomous vehicle technology roughly three years ago and we have development teams in both the US as well as China. We have 40 autonomous vehicles being encrypted with our sensors and we have licenses in both Mountain View, California as well as Beijing, China. We are on our way to developing autonomous vehicles and we also think we will be one of the frontrunners in terms of autonomous vehicle technology development.
DiDi Has a Lot of Advantages in Autonomous Vehicle Development
We’ll start with small areas in terms of testing. DiDi has a lot of advantages in autonomous vehicle development because we have this transportation network and we know where the origin and the destination is and we know if this area is suitable for autonomous vehicle operation as well. If it’s suitable we can send an autonomous vehicle to serve for this trip or otherwise we can send a human-driven vehicle.
An Internet Company, AI Company, and Transportation Company
We are not only an Internet company and we’re not only an AI company, but we also are a transportation company which runs for people from origin to destination. That’s a lot of responsibility and we need to make this safely and efficiently. As a service provider, we utilize our technology conscientiously while we use this AI technology. We also cooperate with the government because our service actually complements public transportation systems.
DiDi Has a Lot of Advantages in Autonomous Vehicle Development