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

PUBLISHED : Friday, 18 September, 2015, 11:22am
UPDATED : Friday, 18 September, 2015, 11:22am

China's capital has launched a government-backed car-hailing app called Shouqiyueche at a time when taxi drivers nationwide have been complaining of increased market pressure from San Francisco-based Uber and Chinese market leader Didi Kuaidi. 

Unveiled this week, the app connects users with an official service of licensed vehicles and drivers. 

The 500 cars currently in operation were previously officially licensed taxis, which had struggled to find curb-side customers as more people book cabs online, according to state media.

Unlike regular taxi drivers, Shouqiyueche employees do not have to pay rental costs, gas or maintenance fees.

Didi Kuaidi, which is backed by Chinese internet giants Tencent and Alibaba, has faced increased pressure in recent months, amid competition from Uber and crackdowns on its service in multiple Chinese cities. 

This week, the Hangzhou municipal government announced a consultation to potentially give taxi drivers in the city more than 100 million yuan (US$15 million) in rebates to help them see off competition from ride-hailing apps. 

The city of Shenzhen in southern Guangdong province went a step further, declaring illegal all apps that connect users with private drivers. Didi and Uber both do this, as well as connecting users with licensed taxi drivers. Drivers in the province have also faced major fines for allegedly charging for rides without a taxi license.

Rival Uber has had problems of its own. The US company's offices in Sichuan's Chengdu and Guangdong's Guangzhou were raided in May, throwing its legality into doubt. 

Didi has made some ground in gaining official recognition, partnering with local governments in Shanghai and Zhuhai, also in Guangdong, to create licensed car-hailing platforms. 

This month, the app, valued at more than US$15 billion, launched a major rebranding campaign with a new logo and name for its primary app Didi Dache, now Didi Chuxing.