Ctrip among new players driving into ride-hailing
Print Edition
PASSENGERS in China’s ride-hailing market may benefit from new players driving into the sector unveiling new business models and subsidies, Shanghai Daily learnt yesterday.
Ctrip Inc said yesterday it has regulatory approval to operate own-brand car-hailing service as China’s biggest online tourism firm expands into the fiercely-competitive market. Other firms like Meituan Dianping, Yidao and AutoNavi have made huge investment and introduced new business models into the car-hailing services market as they prepare to do battle against each other and challenge the dominant market leader Didi Chuxing.
Latest players
Shanghai-based Ctrip has received a national car hailing license through a subsidiary in Tianjin. But the firm still requires approval from city regulators to officially start own-brand services locally. But Ctrip said today that it was unable to reveal the date it could debut its service in Shanghai.
By 2017, China had 225 million car-hailing users — a market with great potential for all firms. The market is still “short of supply” even with taxis and current car-hailing firms, said Li Qiao, chief executive of Ctrip car-hailing business.
Ctrip has offered related services since 2015 through partnership with firms including Didi Chuxing and Yidao. It plans to offer “high-quality and reliable” own-brand services for passengers besides providing subsidies, the firm said.
AutoNavi has offered car-hailing services since the end of last month, banking on its map and navigation services. Yidao, which used to be a subsidiary of LeEco, unveiled new business models like no commission fee charged for drivers.
Didi Chuxing, whose stakeholders include tech giants Apple, Alibaba Group Holding and Tencent Holdings, has taken the lion’s share in the domestic ride-hailing market after its merger with smaller rival Kuaidi in early 2015.
Lifestyle services website Meituan Dianping launched a car-hailing service in Shanghai at the end of last month to take on leading player Didi Chuxing, and raising concerns over a new round of price war.
It offered discount of up to 14 yuan (US$2.23) for each ride in the first week of its launch, but some riders complained that its mapping and location services were poor.
The company also provides an additional 50 yuan subsidy if riders invite friends to use the new service.
Meituan Dianping is said to capture one-third of the Shanghai market within two weeks of the launch, media reports said.
Fighting back so that it does not lose market share to new entrants, Didi also gave discounts for riders. It offered a 300 yuan subsidy to new drivers who complete three rides within one day so that there is a sufficient supply of vehicles on its platform.
New business models
Industry watchers noted that the era of rapid growth for ride-hailing services is over, and it almost cost nothing for users to switch between several ride hailing services. Didi is also eying alternative growth potential such as a public bike rental service to keep its user base active.
Unlike previous rivals, Didi Chuxing now faces new competitors with resources such as capital, a huge user base and employ advanced technologies, analysts said.
Meituan Dianping, which is known for its online-to-offline business model offering services from restaurant reviews, food delivery, movie ticketing and travel booking, said car-hailing is an indispensable part of its O2O ecosystem that helps link consumers with various kinds of service providers.
In the first three months of its operation in Shanghai, Meituan Dianping would waive an 8 percent commission from drivers, while Didi drivers are charged around 25 to 30 percent commission.
Yidao, boasting new investors, said it is testing a new business model of not charging drivers.
Compared with other firms, Ctrip has a unique advantage in that it integrates car-hailing with its tourism business covering airport and taxi pickups in other cities, which reap the firm a high profit margin, according to industry insiders.
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