China Ride-Hailing War: Didi faces fierce competition from Meituan and other rivals
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The murder of a female passenger on the ride-hailing service Didi Chuxing has sparked a fierce debate online over the safety of ride-hailing. Didi Chuxing has become China's undisputed ride-hailing giant, after merging with Uber's China business in 2016. But now the road is much bumpier as new players and competitors have emerged. So far, there are some 70 car sharing platforms across the country. One of the newest players is Meituan-Dianping, China's leading online lifestyle platform. CGTN's Wu Lei has more.
WU LEI SHANGHAI "China's car-sharing market is expanding fast in mega cities, thanks to companies like Didi Chuxing. And now newcomers are trying to take the trend for a ride. Let's try one of the latest players -- Meituan-Dianping, which launched a car-hailing service in Shanghai in March."
Meituan offers only taxi and express cars, while Didi offers more options at different prices, including express, taxi, luxury and premier cars.
Fees for express cars, covering an equal distance, are similar for both platforms for passengers. The real benefit is for drivers right now, a new car-hailing platform always means less commission fees. Mr. Yu used to be a Didi driver, but now he has turned to the Meituan platform.
MR. YU DRIVER "I can make about 800 yuan a day if I drive for 10 hours on Meituan. It is much more than what I earned before, because Meituan does not charge commission fees for the first three months and we drivers can keep all of the earnings."
After 3 months, these drivers will be charged 8 percent commission fees, which is lower than the 20 percent charged by Didi. After a one-week rollout that waived its drivers' commission fees in Shanghai, Meituan declared that it had acquired a third of the city's market share.
LU WEIJIA, PR DIRECTOR MEITUAN'S CAR HAILING BUSINESS "We don't advocate the strategy of a price war, we hope all companies can do business in a fair market. And Meituan doesn't focus only on its car-hailing service, but is hoping to enable an easy transition from car-hailing to food, restaurant and movies within the app, offering a great experience for consumers."
In addition to Meituan, the vast market potential is attracting new players to jump on the bandwagon, including Ctrip, China's leading online travel service provider, and Gaode map, a location and navigation service provider. At its latest news briefing in late April, the Ministry of Transport warned that car hailing platforms should stop over-subsidization and prevent illegal operations.
WU CHUNGENG, SPOKESMAN CHINESE MINISTRY OF TRANSPORT "The previous market experience has shown that over-subsidization and a price war are not sustainable. These strategies will be a burden for companies and will harm consumers' interests."
And of course consumers are welcoming these platforms as it brings them more commuting options. But with more options on the table come more expectations.
MS. ZHAO PASSENGER "I use car-hailing apps a lot, what I care most about are lower fees, waiting times and a more safe experience."
Transport officials say they will intensify investigations and punish those who violate regulations. WL, CGTN, SH.