Why Didi’s regulatory pain does not mean immediate gains for its smaller rivals in China’s ride-hailing market
- Regulatory restrictions placed on Didi, including correct licensing for vehicles and drivers as well as protection of passenger data, also apply to competitors
- Didi remains the most stable source of orders and the app also allows drivers to set their direction and distance preferences, giving it an advantage
One and a half months after Didi Chuxing was banned from taking on new customers by Beijing, there is little sign that its dominant position in China’s ride-hailing market is being undermined by rivals keen to take its crown, according to analysts and drivers.
Tough regulations for the ride-hailing market, including correct licensing for vehicles and drivers as well as watertight protection of passenger data, also apply to Didi’s competitors such as Meituan and Autonavi, a service backed by Alibaba Group Holding, owner of the South China Morning Post.
And Didi’s control of roughly 90 per cent of the market, with 493 million uses and 13 million drivers, makes it hard for any company to mount a serious challenge.
An opinion piece in the official Economic Daily on Wednesday argued that frenzied attempts by other players to expand their presence in the ride-hailing market amid Didi’s troubles would be unhealthy. “All companies should remember that while the industry can be reshuffled, the rules can’t bend,” stated the article.
The subtle warning to Didi’s rivals also comes amid several industry scandals.
Meituan, for instance, suspended ride-hailing services in a district in Nanjing. China’s state radio, citing local traffic authority, said the online services giant had failed to follow local pandemic control requirements. Meituan rejected the allegations, saying it had decided to suspend its service in the district to comply with pandemic control requirements and there were no violations.
