Ctrip the latest to challenge Didi Chuxing in China’s ride-hailing market

Ctrip.com International, China’s largest online travel service, has emerged as the latest entrant in the country’s ride-hailing market, a move that could intensify competition in a business now dominated by Chinese car-on-demand giant Didi Chuxing.

New York-listed Ctrip, which is backed by global online travel service leader Booking Holdings, said on Tuesday it has been granted a licence to offer web-enabled car-on-demand services in China, a step that pits it directly against Didi in the rapidly growing Chinese market where about 225 million people used smartphone apps to hail rides last year.

Shanghai-based Ctrip, which offers mobile web applications for services such as hotel reservations, flight ticketing and package tours, has been building up its chauffeur and car rental services to provide enhanced transport options for its customers.

Ctrip’s announcement follows the recent move by Chinese tech major Meituan Dianping in launching its ride hailing service, the first strong competitor to emerge since Didi thought it had sewn up the market after pushing Uber out of China.

China ride-hailing war seen erupting again with new challenger to Didi

Beijing-based Didi, which counts tech giants Apple, Alibaba Group Holding and Tencent Holdings among its biggest shareholders, became the dominant player in China’s ride-hailing market after pushing Uber out of the country in 2016. Didi and Uber engaged in a destructive price war for dominance in China, with billions of yuan spent to buy loyalty from riders and drivers, effectively giving consumers free rides to win market share.

Ctrip didn’t reveal details on when and where it would officially launch the ride-hailing service. In a statement released on Tuesday, the chief executive of Ctrip’s chauffeur car service unit Li Qiao said there was huge untapped potential in China’s ride-hailing market.

“Now the focus of competition in ride hailing has shifted from price to service. Users are more willing to pay for good service. Using subsidies may lower the quality of service and eventual lose customers,” Li said.

With new players in the market, the quality of service and safety of passengers has once again become the focus of China’s ride hailing competitors.

Didi this week became the focus of attention after a female passenger accused it of ignoring a sexual harassment complaint against one of its drivers. In a post on the WeChat social media platform on Sunday, the passenger gave an account of the incident and wrote a scathing criticism of Didi’s customer service. The post has since gone viral.

In an email statement on Tuesday Didi said its was “deeply sorry” that the rider experienced such distraught and helplessness when using their service.

“In this case, the driver also raised concerns regarding this trip. We have taken the views of both parties into consideration when reviewing this case. We have examined the available information from the trip record to the best of our abilities. We believe we could have done better in our communications to assuage the riders’ concerns,” it said.

Alibaba owns the South China Morning Post.

Additional reporting by Sarah Dai.