Close
Close

Published

GM postpones Cruise taxis as Toyota invests $600mn in Didi Chuxing

There’s a definite air that progress in the self-driving ridesharing services realm involves throwing a lot of money at a wall and hoping some of it sticks. For all the talk of it being the future of mobility, public opinion remains wary, with academia now trying to show ridesharing’s environmental claims are bunkum.

GM’s Cruise is only fueling this narrative, postponing the 2019 launch of its driverless taxi service, while Toyota has found another $600mn burning a hole in its pocket, and decided to stick it in Chinese ridesharer Didi Chuxing – the firm that chased Uber out of China.

The Toyota deal is a bit complex, but that’s largely due to Chinese rules on private ownership. Toyota Motor Corporation is investing $600mn into Didi, but then the two are setting up a joint venture with another joint venture – namely, GAC Toyota Motor, which is (surprise!) a partnership between GAC Group and Toyota Motor Corporation.

The new joint venture between Toyota, Didi, and GAC Toyota doesn’t yet have a name, but it is going to focus on providing vehicle-based services to the drivers on Didi’s ride-sharing platform – a platform that it recently opened up to its rivals, where users can access these competitor services through the same application. China is somewhat unique, in that many of its automakers are working on their own branded ride-sharing services, with what looks like more enthusiasm than the more established automakers.

Toyota and Didi made an announcement last year, prior to money changing hands, saying they would collaborate on self-driving software, electric vehicle battery systems, and a modular manufacturing process to build autonomous vehicles of different sizes. The new deal now allows Didi drivers to lease Toyota vehicles, which will use Toyota’s TransLog telematics system to provide support and diagnostic services too, via Toyota’s Mobility Services Platform (MSPF) – “quality car maintenance support and safe driving guidance to ride-hailing drivers.”

This new investment is hardly exclusive. Toyota is also an investor in Uber and Japan Taxi. Didi counts Tencent, Alibaba, and Apple as investors, and also has partnerships with Volkswagen, the Renault-Nissan Alliance, and a few Chinese automakers, including GAC, Dongfeng, and FAW (the three that are now enjoying aforementioned access to Didi’s ridesharing app).

In its public statements, Didi talks about creating a platform that combines energy usage and generation with mobility technologies, harnessing a whole heap of AI-based tools. It is thought to have around an 80% hold of the ridesharing market in China, but it still loses money on many trips – taking 19% of a trip’s fee, but having costs that accounted to around 21% of the average trip.

“We look forward to combining Didi’s expertise in AI-based large-scale mobility operations and Toyota’s leading connected vehicle technology to build a next-generation intelligent transportation framework for sustainable cities,” said Stephen Zhu, a senior vice-president at Didi, in the statement.

As for Cruise Automation, it had been riding high, valued at $19bn after netting $1.15bn. At that time, it was talking up the driverless taxi service that it was going to launch, passing 1,000 employees and planning to hire between 100 and 200 more engineers. It now has some 1,500 staff, according to the announcement that heralded the hold-up.

But now it is postponing the service launch, softening the blow by announcing that it would instead be building the largest EV charging station in the USA. Cruise’s CEO, Dan Ammann, cited performance and safety concerns as the justification, and promising to increase its testing mileage.

This is perhaps, if the rumors are true, a wise response to the push-back that the NHTSA had significant concerns about the SAE Level 5 vehicles and their lack of human controls. Running 2,500 modified Chevy Bolts in San Francisco would have been a huge coup, but it seems that Cruise lost faith in the technology – and perhaps saw the mountainous legal bills that might arise from a crash, given the hostility with which insurance providers have greeted the news.

Close