Iconic auto manufacturer Volkswagen and Chinese ride-hailing company Didi Chuxing has come to an agreement in forming a partnership to co-develop self-driving cars. As part of the deal, the German automaker will initially manage a fleet of about 100,000 new vehicles for Didi. Two-thirds of the vehicles will be the automaker's own cars. This partnership will grant access to customer behavior data to Volkswagen while allowing the ride-hailing company to expand its fleet. "The joint venture with Didi is not just about ride-hailing. We want to explore mobility projects as well as autonomous driving and robo-taxis," Weiming Soh, board member in charge of strategy at Volkswagen Group China.
Volkswagen has already has past ventures in designing vehicles for ride-hailing services with its Moia electric van and autonomous Sedric concept. These designs may have an influence in the vehicles Volkswagen designs for Didi. The Chinese company wants vehicles with more luggage space but fewer seats since most customers ride alone. They are also less concerned with aerodynamics and top speed because their fleet spent most of their time in the city traffic. This isn't the first time Didi has directly approached an automaker to provide it with cars. In February, the company signed a memorandum of understanding with the Renault-Nissan-Mitsubishi Alliance that lays the groundwork for an electric car-sharing service in China.
Didi's foray into personalized vehicles and vehicle ownership marks a significant shift for the ride-hailing business since current companies in the market such as Didi itself and major rival Uber rely on vehicles owned by freelance drivers. But soon, these services are looking into owning and operating their own fleets since evidence has shown purchases of vehicles from Volvo by Uber, and Chrysler and Jaguar by Waymo for conversion into autonomous vehicles. By sharing data and technology, the two companies hope to develop autonomous vehicles. While this goal may or may not be achievable, Volkswagen has the capital. The German automaker has 15 billion euros dedicated for investments in ride-hailing, autonomous driving, digitization, electric mobility and other services solely for China.