Future of transport

Market leader Didi Kuaidi launches carpooling service to take on 'the People's Uber'

PUBLISHED : Monday, 01 June, 2015, 5:31pm
UPDATED : Thursday, 03 September, 2015, 3:58pm

Mainland China's largest taxi and car-hailing app Didi Kuaidi has launched a car-pooling service as it seeks to head off US rival Uber.

Didi Kuaidi said it has already recruited more than one million drivers to the service, Didi Shun Fen Che (which loosely translates as Didi Carpool). Most drivers were motivated by a desire to "cost share during their commutes" rather than make profit, the company said.

“We are committed to work with the government to build a greener China. Carpooling uses the sharing economy within the internet and travel sectors to reduce the pollution and traffic that can spoil life in big Chinese cities and reshape person-to-person relations,” said Jean Liu, president of Didi Kuaidi.

The service will initially only be available in Beijing, before expanding to 26 cities across mainland China later this month. Users use an app to connect them with a driver, who charges a standard fee of 5-10 yuan for the first three kilometres, around half that of a Beijing taxi, with an additional surchage of 1 yuan per kilometre travelled. The strategy is endorsed by the Beijing government as part of its Green Travel initiative.

Liu said that the company had planned to launch the service for a long time, with the goal to encourage Chinese to adopt carpooling and make a contribution to emission-reduction.

More than 100 million private cars are used for short trips in China every day, she said, and carpooling can reduce traffic and emissions.

However, Didi Kuaidi is entering the carpooling business relatively late and the market is extremely competitive in China.

Last week, due to lack of funding, rising carpooling app Ai Pin Che closed down its service after attracting hundreds of thousands of users since its launch in 2013.

Early birds such as AA Pin Che, which was founded in 2011, have expanded to cover more than 200 Chinese cities with 10 million users. It raised US$4.8 million in its most recent funding round. Another app, Dida Pin Che raised 10 million yuan last November and has spread its service to nine Chinese cities.

In Beijing, Didi Carpool will mainly compete with The People's Uber, a carpool service launched by the US company in the Chinese capital in mid-2014 which allows users to catch a ride without paying for anything but the driver's petrol costs.

Uber expanded the service, from which it currently makes no money, to six other Chinese cities, including Shanghai and Guangzhou, in October.

The American company has struggled in mainland China recently. Earlier this year, two of its offices in Guangzhou and Chengdu were raided by the authorities, following a nationwide ban on private cars offering taxi services.

On a visit to China last week, Uber chief executive and founder Travis Kalanick said the company would "learn the local laws and bylaws to make sure its service is legal in China".

Valued at more than US$41 billion and active in 58 countries and 300 cities worldwide, Uber has faced strenuous competition in China from domestic rivals Didi Dache and Kuaidi Dache, who announced a merger in February that would leave the combined company with a more than 95 per cent market share.

Didi Kuaidi announced last month that it would spend 1 billion yuan (US$161 million) to give free and discounted rides to passengers to promote its chauffer service Didi Express.

Also last month, Chinese social media giant Weibo announced a US$142 million investment in Didi Kuaidi, which is valued at more than US$6 billion.