Ride-hailing operator Didi Chuxing has launched an online financial management system for auto leasing and fleet companies in China, the company announced on Thursday.
“Quanju” allows Didi’s auto partners to manage leasing accounts and financial plans, as well as access risk control and data analytics tools. The ability to monitor a vehicle’s operation, performance, and maintenance in real-time means that risks can be identified and improvements implemented more efficiently, said Liu Xiaoyu, head of Didi financial services operations in China.
Facilitating the operation of leasing and fleet companies will help Didi better manage its overall costs. “Mobility services providers like Didi need to manage the costs for operating the vehicle fleets… to deliver profitability for them and the drivers,” said Bill Russo, founder and CEO of advisory firm Automobility told TechNode.
“If drivers bear the burden of the car payments, insurance, and maintenance as individuals, they will not be able to get as good a price as Didi who can leverage their size to create economies of scale,” Russo added.
Didi expects the new system to serve 1,500 leasing partners in its network by the end of 2019. The ride-hailing operator has been focusing on auto services for the past few years, having set up Xiaoju Automobile Solutions in 2015. It stated in August that it planned on injecting $1 billion into the auto services division. Xiaoju, which provides services including auto leasing, car maintenance, and gas station services, has a gross merchandise value exceeding RMB 60 billion (around $8.79 billion).
However, Didi’s move into ride-hailing finance is relatively new. In January, the company began offering financial services including insurance, automobile financing solutions, and payment services to riders, drivers, and car owners on its platform. Didi has around 550 million users and 31 million drivers on its ride-hailing app, according to the statement.
A move into financial services isn’t uncommon among tech titans in China. BAT (Baidu, Alibaba, and Tencent) and JD.com all have been cultivating their own fintech businesses.
Didi’s new found interest in finance may also help to expand its revenue stream, which is especially critical at a time when its main ride-hailing business is facing increasing public and government scrutiny following passenger murders last year.