The user will open the Didi Chuxing Ride Hailing smartphone app on September 18, 2020 in Shanghai, China.
Qilai Shen | Bloomberg | Getty Images
Beijing — The Chinese version of Uber, Didi Chuxing, seeks to use car travel as a way to various aspects of everyday life, from grocery shopping to finance.
Diddy filed for a listing in New York on Thursday, and many expect it to be the world’s largest initial public offering this year. Founded in 2012, the company ranks among the top five privately held companies in the world, with SoftBank, Uber and Tencent as key investors.
According to the prospectus, smartphone-based ride hailing in China remains Diddy’s main business, with an overall net loss of $ 1.62 billion and revenue of $ 20.4 billion last year. However, as Diddy turned profitable in the first quarter of this year, the revenue share of “Other Initiatives” rose from 4% to 5% overall in 2020. This is up from 1.2% in 2018.
A quick glance at Diddy’s smartphone app reveals many other products related to bike sharing, movers, personal finance and gas stations. The array of icons is similar to the Alibaba family of Alipay apps. Not only is this app a mobile pay platform, it also allows users to book plane tickets and pay utility bills. Similarly, the popular ride-hailing app Grab in Southeast Asia wants to deliver food and become a regional leader in mobile payments.
8 types of car services
Didi is the leading app for ride hailing in China, despite the entry of several other players, including players focused on high-end (Shouqi) and new energy vehicles (Cao Cao).
Users can choose from eight Didi options, from carpooling to luxury car services. Didi also allows users to call taxis through the app and has a driver business that assigns drivers to car owners who may be too alcoholic or may not be able to drive their car for other reasons. I run it. These temporary drivers can move between tasks on a folding bike.
The company said it has 377 million active users and 13 million active drivers annually in China for the 12 months leading up to March 31. Diddy said last year he earned 13.364 billion yuan ($ 20.88 billion) in the “China Mobility” category.
According to the prospectus, customer costs for various types of products, including other Diddy services such as electric bicycles and freight, can range from 15 cents to over $ 100.
Building a finance department
Diddy said in the prospectus that sharing bicycles and electric bicycles contributed most to the total revenue of 5.76 billion yuan from “other initiatives”. Other businesses in this category include urban freight, car leasing, group buying, and financial services.
The company said in August that Didi Finance, a financial technology division not mentioned in the prospectus, announced a partnership with the Bank of Shanghai for consumer financial services and other digital financial products.
Diddy has also partnered with China Merchants Bank to support credit card applications through the Ride Hailing app and offer installment purchase plans for cars. Didi’s subsidiary works with Ping An Insurance to sell not only insurance but also financial and leasing related products.
Start-ups are leasing vehicles to drivers at prices that are about 20% cheaper than off Diddy’s platform. According to the prospectus, more than 600,000 vehicles can be leased, about half of which are owned by about 3,000 car leasing partners, reducing the amount of assets Diddy is responsible for.
By the way, Diddy recently advertised to some Beijing users by setting their own mobile payment system as the default payment option at a discounted price. The user had to manually select other options such as WeChat Pay, after which the discount was removed.
Diddy’s Ride Hailing app also works with international credit cards. The company operates in 15 countries, including Brazil, Mexico and Japan.
Bet on electricity
Many analysts expect self-driving shared vehicles to become the primary mode of transportation in the future, rather than individual vehicle ownership.
Diddy invested in its own self-driving unit, which launched the “Robot Axis” in parts of Shanghai in June 2020. In November, the dispatch company announced an electric vehicle called D1 that was jointly developed with BYD. Chinese cities in the months that follow.
In May, the autonomous driving unit and the state-owned GAC Aion New Energy Automobile agreed to work towards mass production of fully autonomous new energy vehicles.
Diddy claims to have the largest electric vehicle charging network in China, based on a voluntary survey.
Data privacy and other risks
Diddy’s planned IPO in New York results from heightened tensions between the United States and China over the past few years. The Ride Hailing Giants spent almost three pages of the prospectus discussing the risks of delisting due to failure to comply with US government audit requirements.
Increased oversight of tech companies for monopoly practices by the Chinese government and oversight by general regulations on data privacy are also risks cited by Diddy in his prospectus.
In 2018, Didi was attacked by a Chinese social media user who asked to remove the app after a woman was allegedly raped and killed by a driver. As a result, Diddy announced that he would record audio while traveling by car, but it will be removed after seven days.
Diddy did not specifically mention this feature in the prospectus.
Ride Hailing Giant Diddy wants to be more than a Chinese Uber
Source link Ride Hailing Giant Diddy wants to be more than a Chinese Uber