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Ride-hailing service grows despite opposition

2015-June-16       Source: Chinadaily.com.cn

Didi Kuaidi, China's dominant ride-hailing company, keeps growing even as it faces challenges on two fronts: profit-pinched taxi companies are threatening a lawsuit and local governments are considering more regulations.

Government concerns

Didi Kuaidi was created in a February merger between former rivals Didi Dache and Kuaidi Dache and it boasts about 160 million users on its smartphone platforms.

By mid-May, its taxi-hailing service had covered 360 cities and 1.35 million drivers, with daily calls in excess of 4 million, according to the company. Its chauffeur service, meanwhile, covered 61 cities and 400,000 drivers, with up to 1.5 million daily calls.

The latest survey by Analysys International, a provider of information products, indicated that orders from Didi Kuaidi's chauffeur service accounted for 78 percent of the market total in the first quarter of this year.

On June 1, Didi Kuaidi launched yet another service, its Shunfengche car-sharing platform, which enables car owners to share the cars with others. Within the first week into its operation, more than 100,000 transactions were made each day in Beijing.

The company's rapid expansion, plans to dominate the ride-hailing market and opposition from taxi companies have drawn concern and intervention from many city governments.

Since May, senior executives from Didi Kuaidi have been asked to meet with traffic management, transport or public security authorities in a host of cities, including Beijing, Wuhan and Yangzhou. Officials have asked the company to stop using private cars to provide chauffeur and car-hailing services.

Didi Kuaidi is not alone in facing obstacles. Its chief rival, Uber, which ventured into China last July, has been banned in 14 countries and regions. Its Guangzhou branch was raided by local authorities, citing irregular business operations.

As the top transport regulator, the Ministry of Transport has repeatedly said it encourages innovation in the taxi industry, and sees chauffeur services as a way to satisfy diversified demand. However, it has insisted that private cars should not be allowed in for-profit operations because they don't have business licenses and cannot ensure passengers' rights and interests.

The ministry is also soliciting opinions on its newly drafted guidelines to reform the taxi industry. Officials from the ministry convened a closed-door meeting on June 3 attended by transport sector experts, managers of taxi companies and taxi drivers to discuss the reform and issues relating to ride-hailing platforms.

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Editor: Keane Wong

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