Chinese electric carmaker Xpeng the latest to jump into ride-hailing despite ongoing losses at market leader Didi
- The company has raised more than 10 billion yuan from investors including Alibaba and Xiaomi founder Lei Jun
Chinese electric vehicle start-up Xpeng Motors is making a foray into the country’s ride-hailing market, a move that will intensify competition in a business that has yet to deliver profits for industry giants Didi Chuxing and Uber.
Alibaba-backed Xpeng, which received a ride-hailing operation licence from Guangzhou authorities on Monday, could start trial services as early as this month, according to people familiar with the matter.
“It will be an important component to Xpeng’s ecosystem, with cars as the entry point to broader service offering,” said an employee who declined to be named as the information is not yet public. “The ride-hailing service would enable the company to promote its cars to a larger customer base and improve user experience.”
Job openings for fleet managers, operation and business development specialists in mobility services were posted on the company’s website in March. Xpeng declined to comment on the timetable or fleet size of the service, saying that the company’s long-term goal is to “build a smart mobility ecosystem with truly intelligent products, best user experience and value-added services for customers”.
The move would see the start-up join a growing list of carmakers and internet peers in the ride hailing fray even though the industry leaders continue to post losses despite years of efforts.
In April, Didi revealed that it was losing money on many trips after the country’s largest ride-hailing platform disclosed its financial breakdown for the first time. The company pocketed about 19 per cent of each fare in China on average in the three months ended December 31, while the overall cost was about 21 per cent of the fare.