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Sharing economy in China: Issue 1: Car-sharing market in China

The Internet makes it easier and cheaper to aggregate supply and demand, while technologies make it easier for people to share excess items with each other. This forms the basis of a sharing economy.

The concept of the sharing economy is quickly paving new roads into the car-sharing industry. In China, the car-sharing market has developed rapidly over recent years and competition has heated up considerably. Many car-hailing platforms/apps have emerged to provide a wide range of on-demand car services to customers via mobile apps. In terms of market share, Didi Chuxing (85.3%) is the prominent leader, followed by Uber China (7.8%) and Yudao Yongche (3.3%).

The Chinese government released the Interim Measures for the Administration of Online Car-hailing Operations and Services in July 2016, the world’s first national-level regulations that legitimize online car-hailing service. The new regulations will become effective on 1 November, 2016.

On 1 August, 2016, Didi Chuxing and Uber China announced a plan to merge their businesses in China, effectively putting Didi Chuxing in control of their combined car-hailing business for the China market. The deal will reshape the competitive landscape of the carsharing market and it will bring about mutual benefits and win-win results for the two companies. That said, it has raised monopoly concerns and the Ministry of Commerce is reportedly investigating the deal.

Starting 5 September, 2016, Uber is pulling its taxi and van services from Hong Kong, while its main services, UberX and UberBlack, will still be available in the territory. Local taxi drivers have sparked concerns over Uber’s move, stating that the company will further expand its car-sharing services in Hong Kong and may pose a bigger threat to their business.

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Content provided by Fung Business Intelligence
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