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Future of transport

Car-hailing app Didi Kuaidi sees itself as crucial digital step in reform of China's transport system

PUBLISHED : Friday, 07 August, 2015, 1:49pm
UPDATED : Thursday, 03 September, 2015, 3:58pm

Despite protests by taxi drivers across China and recently imposed government restrictions, Didi Kuaidi, China’s Uber-like car-hailing app, views itself as an essential agent of change for the taxi industry that all stand to benefit from.

“We do not believe in disruptive termination,” Jean Liu, the president of Didi Kuaidi, said at a recent two-day conference in Hong Kong for tech start-ups.

In the US, Silicon Valley likes to roll out "disruptive" technologies like Uber to shake up the status quo and make people's lives better.

But Liu, a former investment banker at Goldman Sachs and the daughter of Lenovo founder Liu Chuanzhi, wanted to stress how her company aims to upgrade the traditional way of doing things and work in concert with taxi drivers rather than kill them off. 

She said her company, which also launched a car-pooling service in June, is helping to reform China's transport industry by aligning it with the digital era and should not be seen as a threat to the careers of China’s 2.6 million cabbies.

Didi Dache, the company’s taxi-hailing app, generated 5.2 million taxi orders every day in 2014 on average across more than 300 cities in China, it said.

“We think one day people will all commute by hailing taxi or cars online just like now you shop online,” foreign media quoted her as saying earlier. 

In Hong Kong, Liu said taxi drivers can attract more customers via the app and benefit from Didi Kuaidi’s other offerings, such as by working for its chauffeur service Didi Express

Didi Kuaidi is the result of a US$6 billion merger in February between China’s two top taxi-hailing apps, Didi Dache and Kuaidi Dache. 

Backed by two of the country’s biggest internet companies, internet services provider Tencent and e-commerce king Alibaba, respectively, they controlled and still own over 90 per cent of the Chinese market. 

The two rival apps had begun shelling out huge amounts to compete with one another but the merger consolidated their market share and left Uber China struggling to play catch-up.

As more services encroach on taxi drivers’ business, cabbies in Hong Kong, Beijing, Shanghai, Guangzhou, the Zhejiang provincial capital of Hangzhou and Chengdu in western Sichuan province have all staged protests against apps like Didi Zhuanche and Uber, arguing that private cars are not legally licensed to charge for rides.

Didi Zhuanche is the private-car offshoot of Didi Kuaidi. In Putonghua, “didi” is an onomatopoeic word representing the sound of a honking horn. 

READ MORE: Uber on a collision course with China's taxi drivers and cartels

Beijing and Shanghai cracked down on unlicensed private-car services in May and June, respectively, saying that they violated laws preventing private and rental car owners from picking up customers without a valid taxi license. 

But Liu said she felt “extremely encouraged these days” by how industry regulations were being consolidated and enforced in China.

Liu said the company has been negotiating with the Shanghai local government on how to bring private car services into the regulatory regime. A deal seems to have been reached, but she declined to provide details.

“Government officials in China are much more open-minded and forward thinking than we may think,” she said.

She said Chinese officials have become much savvier after visiting world cities like New York, Tokyo and San Francisco to benchmark their modern infrastructure and regulations.

She quoted the mayor of one Chinese city who told her he was “afraid that his city would [be] left behind when mobile internet services sweep the world”.

Liu said Didi Kuaidi is helping the government to resolve congestion issues while optimising transport resources and giving cabbies and passengers more choice.

Before such taxi-hailing services were set up, people in the Chinese capital had to wait 14 minutes on average to get a taxi, the Beijing Evening News reported. 

But people who use Didi Dache now only have to wait around six minutes, 21st Century Business Herald reported.