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Future of transport

China’s Didi Kuaidi to launch cross-city car-hailing service over Chinese New Year to aid world’s biggest human migration

PUBLISHED : Wednesday, 02 December, 2015, 8:00am
UPDATED : Tuesday, 26 January, 2016, 3:51pm

China’s top car-hailing app Didi Kuaidi and chief rival Uber revealed this week their respective plans to expand in China, but uncertainty remains as to how such apps should be regulated.

Didi Kuaidi, which is backed by Chinese internet giants Tencent and Alibaba, said it will launch a cross-city ridesharing service during the annual Spring Festival next February, the biggest vacation of the year in China, in 400 cities on the mainland.

The move spells good news for hundreds of millions of migrant workers who form part of the biggest human migration in history each spring to reunite with their families.

Often, many struggle to make the journey as transport tickets are sold out months in advance, and car ownership remains relatively low among China’s blue collars.

Each time the big vacation rolls around, usually sometime in early February, China’s transit links are strained. Nearly 3.7 billion journeys are made on trains, buses and ferries over the 40-day festive period, even though the official Lunar New Year holiday lasts for less than a week.

In the southernmost province of Guangdong, 140 million people from the Pearl River Delta region are expected to travel home during this period. However, they must fight for one of just 32 million cheap train tickets.

Didi Kuaidi’s new service asks passengers to input the origin and destination of their trip. The company then uses special algorithms to provide an estimated price, and matches requests with other people heading in the same direction.

READ MORE: Social media on wheels: China’s Didi Kuaidi ‘no longer a taxi app’, offers networking service as daily rides hit 7 million

“I’m very impressed with Didi’s move. It will really help migrant workers who need to get home,” said Zhang Weiran, who works in the city of Shenzhen in Guangdong, several thousand miles from her family’s home in central Henan province.

Didi offers its private car-hailing service in 259 cities on the Chinese mainland. It said it will expand this to 400 by the end of February.

Such services seem to have huge potential in China as its people rush to embrace the developing peer-to-peer or sharing economy, which is expected to become more closely integrated into national strategy over the next five years, said Stephen Zhu, vice president of strategy at Didi.

After a recent backlash against car-and taxi-hailing apps in China, Zhu said he expects Chinese law will soon become more friendly to this upstart industry.

Meanwhile, Uber said on Tuesday it will soon set up a regional headquarters for South China in the city of Guangzhou. This may mark a shift in tone as the local government there previously launched a hardline campaign against car-hailing apps.

Didi attaches great importance to the Guangzhou market and is considering setting up its headquarters for the region in the city in a bid to further localise its China-based operations, Liu Zhen, Uber’s head of China strategy, said in a statement Tuesday.

READ MORE: Targeting Uber and Didi Kuaidi, Beijing launches official car-hailing app

Liu said Guangzhou has replaced Chengdu to rank as San Francisco-based Uber’s most successful city globally, with more average rides each day than any of the other 360 cities it serves. It plans to enter another 100 Chinese cities within a year, the company said recently in Beijing.

“Residents [there] like to try new things,” Liu said, stressing how this applies to internet- and mobile-based technologies.

Chen Xiaogang, head of Guangzhou’s Transportation Committee, said on Monday that local authorities in China welcome Uber as long as it abides by Chinese law.

Besides Guangzhou, Chengdu in Sichuan province and wealthy Hangzhou in East China’s Zhejiang province rank among Uber’s top five busiest cities worldwide.

Both Uber and Didi have struggled in China this year amid a government clampdown on “illegal” taxi-hailing apps. Guangzhou and Chengdu were the first two local governments on the Chinese mainland to launch raids on Uber’s local offices.

In September, Guangzhou became the first Chinese city to levy a stiff fine on a driver working for a car-hailing app. The man, who worked for Didi, faced a record fine of 100,000 yuan (US$15,735) for engaging in illegal transport activities and reaping illicit profits.