Transit giant Didi wants to be more than just China’s Uber
A user opens the Didi Chuxing smartphone app in Shanghai, China on September 18, 2020.
Qilai Shen | Bloomberg | Getty Images
BEIJING – Chinese version of Uber, Didi Chuxing, tries to use road trips as a way to tackle multiple aspects of daily life, from groceries to finance.
Didi on Thursday filed for listing in New York City in what many expect will be the world’s largest initial public offering this year. Founded in 2012, the company ranks among the top five private start-ups in the world and counts SoftBank, Uber and Tencent among the top investors.
Smartphone-based running in China remains Didi’s primary business, generating $ 20.4 billion in revenue last year amid aggregate net losses of $ 1.62 billion, according to the prospectus. But while Didi made a profit in the first quarter of this year, the revenue share of “other initiatives” rose to 5%, from 4% for 2020 as a whole. This is up from 1.2% in 2018. .
A quick glance at Didi’s smartphone app reveals a plethora of other products related to bike sharing, movers, personal finance, and gas stations. The icon lineup resembles that of Alipay, a subsidiary of Alibaba, whose app is not only a mobile payment platform, but allows users to book airline tickets and pay for services. public. Likewise, Grab, the dominant ridesharing app in Southeast Asia, delivers food and wants to become a regional leader in mobile payments.
Didi is the leading ridesharing app in China, even with the entry of several other players, including those focusing on high-end (Shouqi) or new energy (Cao Cao) vehicles.
Users can choose from eight options on Didi, ranging from carpooling to luxury car service. Didi also allows users to hail taxis through its app and runs a chauffeur business that assigns drivers to car owners who may have drunk too much alcohol or cannot drive their own vehicle for others. reasons. These temporary drivers can travel between missions on folding bikes.
The company said it had 377 million annual active users and 13 million annual active drivers in China for the 12 months ended March 31. Didi said he earned 133.64 billion yuan ($ 20.88 billion) in the “Mobility in China” category last year.
Including Didi’s other services like e-bikes and freight, customer costs for different types of products can range from 15 cents to over $ 100, according to the prospectus.
Didi said in his flyer that bicycle and e-bike sharing contributed the most last year to its 5.76 billion yuan total revenue from “other initiatives.” Other businesses in the category include intra-city freight, auto leasing, community collective purchasing, and financial services.
The company said in August that its financial technology arm Didi Finance – which was not mentioned in the prospectus – announced a partnership with Bank of Shanghai for consumer financial services and other digital financial products.
Didi also in partnership with China Merchants Bank to support credit card applications through the rideshare app and to offer installment plans for cars. A Didi subsidiary works with Ping An Insurance sell financing and rental products, as well as insurance.
The start-up leases vehicles to drivers at prices it claims to be around 20% lower than outside of Didi’s platform. While more than 600,000 vehicles are available for rental, about half of them are owned by around 3,000 vehicle rental partners, reducing the amount of assets for which Didi is responsible, according to the prospectus.
For the record, Didi was recently promoting his own mobile payment system to some Beijing users by setting it as the default payment option, with a discount. Users had to manually select other options such as WeChat Pay, after which the discount was removed.
Didi’s carpooling app also works with international credit cards. The company is present in 15 countries, including Brazil, Mexico and Japan.
Many analysts expect that autonomous and shared vehicles will become a major mode of transportation in the future, rather than individual car ownership.
Didi has invested in his own autonomous driving unit, which launched “robotaxis” in part of Shanghai in June 2020. The rideshare company announced in November that it has co-developed an electric car with BYD called the D1, which is said to be deployed in major Chinese cities in the following months.
In May, the autonomous driving unit and state-backed GAC Aion New Energy Automobile agreed to work on mass production of fully autonomous new energy cars.
Didi claims to have the largest electric vehicle charging network in China, based on self-commissioned research.
Didi’s planned IPO in New York City comes as tensions between the United States and China have built up in recent years. The running giant has spent nearly three pages of its prospectus discussing the risks of delisting due to failure to comply with US government audit requirements.
The Chinese government’s increased control over tech companies over monopoly practices and general regulatory control over data privacy are also risks Didi named in his prospectus.
In 2018, Didi was criticized by Chinese social media users – who called for the removal of the app – after a woman was allegedly raped and killed by a driver. As a result, Didi announced that he would record audio during car trips, which would be removed after seven days.
Didi did not specifically mention this feature in his prospectus.