Didi Chuxing, the ride-hailing giant out of China, is continuing to enter into the financial markets as they are hoping to diversify their company while suffering large losses. Recently Didi introduced new financial and insurance options for their drivers and customers. The company is expanding these products by recently launching a new online financial platform focused on car leasing and fleet management businesses.
The move to carve out a product exclusively for third-party partners is telling of Didi’s conviction to secure more drivers and cars amid changing industry currents. In its purest form, a ride-hailing company serves as a marketplace connecting individual drivers and passengers. As Beijing continues to rein in the sector over safety concerns and, some argue, threats that ride-hailing poses to state-owned taxi operators, the industry little by little sheds its appearance as a sharing-economy business.
The most pivotal change comes in the form of government-issued licenses required for both drivers and the cars they operate. To obtain those permits, drivers must go through background checks and exams. The cars, on the other hand, must be fully insured, registered as commercial vehicles and dumped after eight years, as taxis do.
These rules essentially turn ride-hailing into a souped-up, digitally powered manifestation of the taxi industry. To counter the sharp decline in drivers and cars due to new regulatory hurdles, players like Didi either have to invest in driver and fleet management, or outsource the work to third-party companies.
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