Faced with new regulations that jeopardize the size of their driver fleet following the murder of two passengers on its “Hitch” carpooling platform in 2018, ride-hailing app Didi Chuxing is expanding into financial services following a successful trial among a test group.
Financial Times reports that Didi recently rolled out car insurance, personal loans and a crowdfunded medical insurance product to its customer base, available both within the ride-hailing app and in a separate “Didi Finance” app.
Ant Financial, Alibaba’s sister company, and Tencent's WeSure and WeBank platforms are now among the fintech competitors for China-based Didi, Financial Times notes.
“The question on everyone's minds is, is this Didi’s attempt to carve out a new sector for itself, following its losses this year in ride-hailing and in its investment in ofo [the cycle app]?”
“The question on everyone's minds is, is this Didi’s attempt to carve out a new sector for itself, following its losses this year in ride-hailing and in its investment in ofo [the cycle app]?” Chen Lin, assistant professor of marketing at China-Europe International Business School in Shanghai, told FT.
“Some of the products — like car insurance — are low-hanging fruit for Didi. But it remains to be seen whether Didi is able to profit from insurance, for example in the maturity of its risk-management methods,” Lin elaborated.
Didi anticipates that their user data will be an asset for their new venture and heralds their financial services as for an “era of new economy and flexible employment”.
Many believe that Didi is bracing for a slowdown in driver recruitment given the new government-imposed requirements including an exam and ride-hailing business license.
“The impact on Didi will depend on the strength of implementation. It won’t happen all at once,” Bao Jun, analyst at market research firm iResearch, said to FT.