According to local media, Alibaba’s mapping company AutoNavi Holdings Ltd. has started its own car sharing business. The company will launch in Chengdu and Wuhan but has plans to expand throughout China.
Didi, China’s ride-sharing service that bought out Uber and dominated the market for several years now has two competitors. Meituan-Dianping rolled out its ridesharing service in Shanghai in February and has expanded to seven cities in China. To attract drivers, AutoNavi won’t take the standard 7-10% fee for each ride.
AutoNavi is backed by Alibaba Group and has an existing user base that could leverage it to dominate the car-sharing market. AutoNavi is the most popular navigation app in China with more than 700 million users and provides 340 million route recommendations a day. Didi Chuxing currently has 450 million users.
AutoNav will increase Alibaba’s data pool for developing smart city projects and autonomous vehicles
Alibaba is also a shareholder of Didi. In 2016, Alibaba and Ant Financial participated in a US$4.5 billion round in Didi, and Alibaba also participated in a US$2 billion series E round in Didi back in 2015.
Launching a car-sharing service brings huge advantages to Alibaba, which has invested millions of dollars in smart city projects that use big data to facilitate traffic patterns. Using data gathered from AutoNavi, Alibaba has a broad-reaching ability to predict conditions. The ride-sharing launch will only increase the data pools it draws from. Additionally, this data will help Alibaba in its efforts to develop self-driving vehicles.
Will Alibaba’s new service crush Didi’s efforts to expand into logistics, smart cities, and urban transport management? That remains to be seen. In February, Didi Chuxing announced plans to launch its own smart city project. Didi has successfully run a year-long pilot test of its smart city platform in over 20 cities across China with over 1,200 traffic lights fully automated.