A woman uses online ride-hailing service of Ctrip in Beijing on Tuesday.
Competition by newcomers will shape sector
Leading domestic online travel agency Ctrip announced on Tuesday that its online ride-hailing services obtained a license from local transport authorities.
On March 28, the Tianjin Municipal Transportation Commission, representing the Ministry of Transport, issued the online car-hailing license to Ctrip's car-on-demand services, according to a press release that Ctrip sent to the Global Times on Tuesday.
The license will make Ctrip's online on-demand car services legal and available across the country.
Ctrip began to set up its car-on-demand platform in 2015 and after accumulating three years of experience, the platform has unveiled its own car-on-demand services, read the press release.
China's online car-hailing market is very large and the industry's outlook is sound, Li Qiao, CEO of Ctrip's domestic car-on-demand business department, was quoted as saying in the press release.
"But it's a new era of competing in terms of services, not subsidies," and Ctrip will refer to online car-hailing rules of various cities in China and use the strictest one as the basis to offer high-quality online ride-hailing service for users, Li said.
"Ctrip aims to create a complete business ecosystem by launching its own on-demand car services," Men Changhui, senior analyst of Beijing-based internet firm InnoTREE Co, told the Global Times on Tuesday.
Ctrip will not only focus on its online travel service, but hopes to further connect its online service with offline business, such as providing car services for travelers, Men noted.
"With an increasing number of firms' recent launch of online car-hailing service such as Meituan-Dianping, a new round of competition in the sector is likely to develop in 2018," noted Zhao Xiang, an industry analyst at Beijing-based research firm Analysys.
Food delivery company Meituan-Dianping launched on-demand car service in Shanghai on March 21, and in its first seven days provided 2.2 million rides, news site tech.sina.com.cn reported on Monday.
Also, online mapping services provider amap.com launched car-pooling business in Beijing on March 26 by starting the process of hiring drivers, according to media reports. The platform plans to expand the business to Shanghai, Guangzhou and Shenzhen, both in South China's Guangdong Province, as well as other Chinese cities.
"China's online car-hailing service has long been dominated by Didi Chuxing and newcomers may offer more choices for consumers and encourage domestic providers to give better service," a 20-something resident in Beijing surnamed Wang told the Global Times on Tuesday.
"Although I don't know much about Ctrip's online car-hailing service, I'd like to try it," Wang said.
Didi Chuxing's app was downloaded about 760,000 times on March 22, followed by Beijing-based online car-hailing platforms didachuxing.com and Zhejiang-based CAOCAO, which had 158,200 and 53,700 downloads, respectively, on the same day, according to data released by the internet consultancy sootoo.com on March 23.
The domination of Didi isn't actually good for the domestic online ride-hailing industry, because hailing a car online now costs almost the same or sometimes even more than a taxi, Men said.
The domestic car-hailing sector will encounter a new round of competition in 2018 and Didi is unlikely to dominates the market as it did in 2017, Zhao told the Global Times on Tuesday.
Zhao said that some other small and medium-sized online car-hailing platforms will gain certain market shares in 2018.
Competition will help advance the growth of the sector and most of the competition will be benign, said Men.
Transport authorities will also continue to strengthen regulations on China's car-hailing industry, experts said.
Didi and Meituan Dache were each fined 100,000 yuan (,916) by Shanghai transport authorities for illegally providing online ride-hailing services, news site thepaper.cn reported on Tuesday.
The Chinese government released regulations that aim to regulate the taxi market and car-hailing services on July 28, 2017. Those rules took effect on November 1, 2017.
The regulations requires that car-hailing platforms, such as Didi Chuxing, must review the qualifications of drivers and their cars to guarantee safe rides.