How a Chinese cab service uses AI to purge the surge

In China, cab aggregator Didi Chuxing is betting big on Artificial Intelligence and Big Data to make their algorithms predict demand and adjust the number of drivers in a locality for maximum efficiency.

Written by Leela Prasad | Beijing/new Delhi | Published: May 1, 2016 6:27 pm
Didi Chuxing, chinese cab service, Didi Chuxing surge pricing, uber ola, uber ola surge pricing, peak hour surge priceing, cab service surge price, technology news, latest news The company aims to predict demand in a locality based on past trends such as office hours and deploy drivers to that area to meet the rush.

The second phase of Delhi’s odd-even rule ended Saturday, but restrictions on “surge pricing” used by cab aggregators Ola and Uber to meet demand and supply is not expected to end till the state government issues sector-specific guidelines.

During the 15-day period of the road rationing scheme, the Delhi government forced Ola and Uber to suspend surge-pricing after its users complained of fares as high as five times the normal fare during peak hours. Ola and Uber maintained that it is necessary for them to increase the fares to encourage more drivers to accept rides when the demand is high.

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In China, cab aggregator Didi Chuxing is betting big on Artificial Intelligence and Big Data to make their algorithms predict demand and adjust the number of drivers in a locality for maximum efficiency.

While fixing fare prices during peak hours, their algorithms take into account multiple variables such as income earned by a driver during that day and distance of the ride. The shorter the distance of the ride the more it would cost a user.

Didi’s senior director for international strategy, Li Zijian told Indianexpress.com: “People don’t like surge-pricing. We take into account other factors to make the experience pleasant.”

Even outside peak hours, especially during late nights, their algorithms factors in the drivers past record in accepting rides and the distance and time taken to reach the pickup location.

In April, Didi rebranded its machine learning research institute as Didi Research and brought on He Xiaofei, who once worked at Yahoo! Research Labs, as its president.

The research institute will focus on dynamic pricing, car-pooling and supply and demand forecasting to name a few. They are expected to improve efficiency and reduce costs for its services.

The company aims to predict demand in a locality based on past trends such as office hours and deploy drivers to that area to meet the rush.

Backed by Chinese internet giants Tencent and Alibaba, Didi currently operates in 400-plus cities and claims to control over 70 per cent of the market in mainland China. They are rapidly making inroads into tier-2 and tier-3 cities. Didi also recently partnered with India’s Ola, America’s Lyft and Malaysia’s GrabTaxi to help their users travelling abroad hail cabs from other services without switching between apps. The company also has made significant investments in Ola.

 

The writer was in Beijing on the invite of Cheetah Mobile

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