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Didi Kuaidi, the ride-hailing service slugging it out in China with Uber Technologies Inc., is partnering with China Merchants Bank Co. to provide automobile financing and help its 14 million drivers with car payments.
Merchants Bank, which is making a strategic investment in Didi, will provide loans and payment plans to qualified drivers. The pair are also working together on bank cards and in-app credit card payments, Didi President Jean Liu told reporters at a press conference on Tuesday.
Didi, which has so far expanded into 400 cities in China and attracted 250 million users, plans to roll out credit and debit cards with the lender in the second quarter that offer discounts and benefits to riders. Competition in the nascent ride-hailing arena is heating up with Uber announcing Tuesday it will expand into 18 more cities across three provinces, taking its total coverage to 55 cities by the end of February.
Our drivers “at some time, they all need to replace their cars or buy a new one, so this plan will enable these drivers to get a car in a more economical way,” Liu said. “From the CMB perspective, they love this business because they worry about risk control and they want very steady revenue income. The profile should be very safe for them and our drivers fit this criteria.”
Didi, which is backed by Internet giants Alibaba Group Holding Ltd. and Tencent Holdings Ltd., wouldn’t say how much Merchants Bank invested in the company or the valuation it received. Liu said the company has more than $3 billion of cash.
Didi and Uber have been locked in a race for market share and are dishing out incentives to attract drivers and riders. Demand for car-booking has risen as consumers frustrated with hailing taxis on the street turn to smartphone apps to reserve rides. Uber plans to be in 100 Chinese cities by the end of this year, according to a statement e-mailed by the company on Tuesday.
Beijing’s local transport commission has criticized car-booking apps for exacerbating traffic jams by adding about 60,000 cars to roads every day. Liu countered on Tuesday that users of such apps aren’t in the same group as bus commuters, and that the company is helping cut down on private car ownership.
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This article was written by Lulu Yilun Chen from Bloomberg and was legally licensed through the NewsCred publisher network.