Chinese taxi-hailing app Didi Kuaidi wants to do more than just drive you home

Cheng Wei, founder and CEO of popular taxi app Didi Dache, on how the combined entity of Didi Dache and Kuaidi Dache will evolve into a full-service transportation platform.

Didi-Kuaidi, China’s biggest ride-hailing company, is a growing threat to Uber and other similar apps in China. A joint force since the Valentine’s Day merger of the two front-runners in the taxi app industry—Didi Dache and Kuaidi Dache, the company, which controls 99 % of China’s car-hailing market, has quickly forayed into the private car market, garnering millions of orders per day across the country.

Last month, the company launched a low-cost service called Yihao Kuaiche (literally translates as “No.1 fast car”), a direct response to People’s Uber service, which has fuelled Uber’s rapid growth in China. Likewise, Yihao Kuaiche is branded as not-for-profit and allows private car owners to sign up as full-time or part-time drivers, which technically is still illegal under Chinese regulations (see the scheme ride-hailing apps use to avoid legal disputes). The fare is usually about 30 % lower than regular taxis.

Although organising private cars is still something that falls in the legal grey area, Didi-Kuaidi is determined to expand into a full-service transportation platform. At a private CKGSB event recently, Cheng Wei, founder and CEO of Didi Dache (Didi and Kuaidi still run independently with a joint-CEO arrangement), shared his thoughts on why Didi survived the brutal competition and how the company’s strategy has changed since the merger.

The end of the subsidy war

Before Didi and Kuaidi’s joined hands, the two were in a bloody fight. To lure drivers and riders to their apps, Didi and Kuaidi spent a whopping $700 million in total on rewards and discounts between the summer of 2013 and until late 2014.