Car hailing gears up for bitter fight

New players are ramping up the competition in China’s fast-growing ride-hailing sector.

Car-hailing app Uber in Beijing. Image: Julien GONG Min, CC BY-NC-ND 2.0

China Everbright Bank’s financial leasing arm will invest 5 billion yuan ($743 million) in Pang Da Automobile Trade Co Ltd’s (PD Group) car-hailing app Dingding Yueche, further intensifying competition in the industry after regulators in major Chinese cities rolled out strict requirements for car-hailing services.

The two sides signed a strategic cooperation agreement in Beijing on Thursday. The investment will support Dingding Yueche’s expansion in the car-hailing market, enhance car-hailing efficiency, reduce vehicle costs for drivers and guarantee drivers’ income.

Dingding Yueche has offered multiple app-based transportation options, including taxi hailing, private car-hailing, ride-sharing, chauffeuring and buses in many cities across the country.

New players in the sector are ramping up the competition in the nation’s fast-growing ride-hailing sector. Founded last September, Shouqi Limousine and Chauffeur affiliated to Beijing Shou Qi Group, is quietly rising and getting ready to take on Didi Chuxing and Uber.

The car-hailing company has launched operations in 30 major cities, owns more than 8,000 vehicles and takes more than 40,000 orders each day.

Several days ago, transport authorities in Beijing and Shanghai issued draft local regulations on drivers and private vehicles, requiring that drivers have a local hukou (household registration), which means people from other cities are unable to provide services in those cities.

Shouqi Limousine and Chauffeur said all of its drivers were previously taxi-drivers from Shou Qi Group and had a local hukou. Analysts said these vehicles and drivers seem to conform with the new regulations.

Wang Chenxi, a transport analyst for internet consultancy Analysys said: “Dingding Yueche and Shouqi Limousine and Chauffeur are focused on chauffeuring services, and the rapid growth of their business will intensify competition in this sector,” adding it will in turn make their rivals accelerate the pace of their innovation.

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