It’s no secret that ride-hailing is a cash-burning business. Apart from relying on fundraising and other revenue streams, China’s largest ride-hailing company Didi Chuxing has been retaining drivers’ income on its platform for as long as possible, probably in a bid to alleviate its financial stress.
According to Didi Chuxing’s policy, drivers’ payment can be retained on the platform for as long as 8 days. Drivers can only withdraw their payment every Tuesday from 9 am to 10 pm with a cap of RMB 15k (USD2.3k).
At the same time, Didi Chuxing is also holding driver’s money through its financial services such as its e-wallet Jin Jubao, and microloan service Dishuidai to further glue drivers.
Didi Chuxing’s customer service told a local media that retaining the drivers’ earnings is to avoid risks if earning were to change.
Losses & Cash reserve
KrASIA had previously reported that Didi Chuxing incurred a loss of USD 300 – 400 million in 2017, despite a 70% increase in its GMV which reached as much as USD 27 billion during the same period. The ride-hailing company expects to turn a small profit in 2018.
The Beijing-based company reportedly holds a USD12 billion cash reserve after raising USD4 billion in December 2017.
Competition & Expansion
Well-funded as Didi is, the company is facing a bruising subsidy-fueled war with Meituan-Dianping, the world’s largest O2O platform backed-by Tencent. Meituan-Dianping has kicked off its ride-hailing service in two Chinese cities, Nanjing and Shanghai, with a wider expansion plan in the pipeline.
Apart from that, starting this year, Didi Chuxing has been actively pushing for its global expansion. In January, the company acquired Uber’s Brazilian rival 99 and also launched in Taiwan. Later in April, the company kicked off its services in Mexico. It also announced last Friday to launch in Melbourne on June 25.
Editor: Jason Zheng