China’s ride-hailing market hits a speed bump after subsidies cut, regulations imposed
Didi Chuxing and other ride hailing apps in China are poised for slower growth amid the end of generous subsidies for passengers and drivers
Yu Xinghua, a young man in his 20s who used to work for Uber and now drives for Didi Chuxing – the two major car-hailing and ride-sharing apps in China – is thinking of quitting the industry.
Yu said drivers could earn up to 30,000 yuan a month in 2015 with the companies’ subsidies but now have to work more than 10 hours a day to earn 7,000 to 8,000 yuan per month.
China has become the world’s largest online car-hailing market in recent years, but the development of the sharing economy seems to have hit a speed bump lately, even after the government formally legalised online car hailing services earlier this year.
Many drivers are weighing up whether to quit the industry, amid concerns about pay cuts and unfriendly local regulations, as customers use the apps less frequently because of reduced subsidies and higher prices.
This follows the merger of the industry’s two biggest players, Didi Chuxing and Uber China, in August. In October transport authorities in big cities released strict local regulations on qualifications for vehicles and drivers who provide ride-sharing services.
Next year, the market will likely see moderate growth in terms of daily orders and new users, as the high-water mark for growth appears to have peaked during the last two years, industry insiders and analysts say.
