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Life in the Ride-share Lane

Set on out-Ubering Uber, Didi Chuxing was formed following the 2015 merger of Kuadi Dache and Didi Dache, two of the Chinese mainland's leading taxi-booking apps. Keen to distance itself from the negative connotations associated with the online taxi-hailing sector, the merged company has sought to establish its credentials in other transportation sectors, including car and coach hire. One of the first fruits of the merger, was the launch of Didi Hitch, its dedicated ride-sharing app.

Launched last June, Didi Hitch pairs up would-be passengers with drivers already heading for their target destination. Typically, a passenger makes a request on the app, a driver indicates their willingness to share their car, and the two meet up and proceed to the destination. The passenger then pays the driver a relatively small sum as a contribution towards the petrol and both parties are free to leave feedback on their experience.

Unusually, Didi Hitch does not charge any fees to drivers or passengers, with the whole value of the transaction payable to the car owner. In terms of cost, charges vary in different cities according to local traffic conditions and vehicle-use expenses. Typically, though, fees start at about Rmb5 to Rmb10 per trip, with the total cost calculated on a Rmb1 per kilometre basis.

"Didi Hitch offers users a pleasant experience when it comes to sharing and developing relationships,” said Liu Qing, President of Didi Chuxing. “It may well become the new norm for eco-friendly living."

Huang Jieli, Didi Hitch's General Business Manager, said ride-sharing is most in demand for commuting to and from work. He highlighted the popularity of the app's "tag" feature, which allows drivers and passengers to endorse one another after the successful completion of a shared trip. These tags can then be used to pair compatible drivers/passengers for future journeys.

Tapping the Benefits

Overall, the rise of ride-sharing offers the benefit of improving traffic flow and cutting pollution levels. Figures from several mainland cities show the huge potential for such a service.

In Beijing, for instance, there are now 63 cars for every 100 households, according to the Ministry of Public Security's Traffic Management Bureau and Baidu,  At the same time, the average one-way commute for Beijing office workers is 19.2 kilometres, with an average journey time of 52 minutes. It is clear then, that ride-sharing could drastically cut the number of cars on the roads, potentially reducing both travel time and harm to the environment.

Beyond Beijing, according to 2014 figures from the Ministry of Public Security, the mainland is now home to more than 300 million licensed motorists, including 244 million licensed passenger-car drivers. In total, as of November 2014, there were also 154 million cars on the mainland. With these figures set to rise, it is clear that the growth in ride-sharing is both socially and environmentally desirable.

Other countries have recognised the potential benefits of the practice. In the United States, authorities have been keen to nurture the practice through a series of initiatives aimed at helping to schedule rides and pair drivers and passengers. The most sophisticated example of the practice is in Germany, where every city has a dedicated office for coordinating ride-sharing.

For more China market opportunities, please visit: http://research.hktdc.com.

Content provided by Hong Kong Trade Development Council
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