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Didi Chuxing

Cabbies in China's wealthy Hangzhou could get US$15m in rebates to soften blow of car-hailing apps like Uber, Didi Kuaidi

PUBLISHED : Wednesday, 16 September, 2015, 7:00am
UPDATED : Wednesday, 16 September, 2015, 7:00am

A major mainland Chinese city is considering lowering fees paid by taxi drivers to limit the financial hit brought on by car-hailing apps such as Didi Kuaidi and Uber.

If the plan goes ahead, taxi drivers in Hangzhou will see fees fall by as much as 400 yuan (US$63) a month, news portal Sohu reported.

“According to our initial count, Hangzhou will give a one-off rebate to more than 2,600 taxis, or a total of 100 million yuan [US$15 million] in fees,” said Hangzhou municipal transportation bureau official Lu Xiande.

Taxi operators in Chinese cities have complained of losing income due to ongoing fierce competition between ride-hailing apps such as Didi Kuaidi and Uber.

The two rivals, which have both pledged more than US$1 billion to growing their business in mainland China, have offered discounts and free rides as they attempt to grow their customer base.

Resistance from big taxi firms, which are sometimes government-backed, has seen local authorities crack down on the services and attempt to find common ground with the new companies.

In August, Didi Kuaidi, which is backed by Chinese internet giants Tencent and Alibaba, partnered with the municipal government in Zhuhai, Guangdong province, to create a taxi information service to share industry data and resources.

The company launched a similar platform with authorities in Shanghai in June, while earlier this month authorities in Shenzhen declared car-hailing apps matching drivers to riders to be illegal.

The Hangzhou proposal will also consult on whether to remove controls on the total number of taxis and pricing, the formation of a public service management company for taxis and to lay the foundations for cooperation with online cab hailing platforms.