Want China Times, Staff Reporter 2014-10-19
 |
| Taxi app advertisement. (Photo/Beijing XiaoJu Technology) |
The
competition between cab-hailing apps has moved beyond helping customers find a
taxi and is now focused on building a platform for transportation services,
Shanghai's National Business Daily reports.
"After
spending 1.5 billion yuan (US$245 million) over two years, we can be called the
internet startup that has burnt the most money," said Cheng Wei, CEO of
Beijing Xiaoju Technology that operates cab-hailing app Didi Dache.
Cheng's
remarks on Oct. 11 were made after his company and rival Kuaidadi ended a
cutthroat subsidy war over the cab-hailing services market earlier this year.
The two are now battling it out over establishing transportation service
platforms, the newspaper said.
"No
one can say how much will be invested over the next five to ten years, but we
and our investors would not dare make such investment if we did not think of
the travel service platform as a valuable market," Cheng said.
Given the
massive room for improvement in the transportation sector, industry insiders
told the newspaper that cab-hailing services are unlikely to rely on subsidies
for customers or stay in one sector for the long term.
The heavy
subsidies ended in May after Kuaidadi and Didi Dache each secured funding from
e-commerce giant Alibaba and web portal Tencent, respectively, the newspaper
said.
With
cab-hailing services unable to turn a profit, Kuaidadi, and later Didi Dache,
launched ridesharing services to tap into a more lucrative and high-end market,
the newspaper said.
Kuaidadi
further established partnerships with Air China, Alipay, and online map
services AutoNavi and Baidu, while Didi Dache teamed up with over 100 car
rental services and hired its own drivers.
Compared
with food, clothes and housing, Cheng said transportation is a sector that has
not seen close integration with the internet, and the rise of mobile internet
has provided the opportunity for just that.
Meanwhile,
Cheng does not expect his company to turn profitable in the next three to five
years and his company has no plan to go public.
According
to a forecast made by industry insiders, the ridesharing market in China is
expected to reach a scale of 400 billion yuan (US$65 billion) in 2016.
Uber, which
established the ridesharing market in the United States, and AA (Anytime
Anywhere) are both existing players Didi Dache and Kuaidadi will compete
against in the Chinese market, the newspaper said.
No comments:
Post a Comment