Ctrip Obtains License to Join Cut-Throat Competition in China’s Ride-Hailing Market

Ctrip Obtains License to Join Cut-Throat Competition in China’s Ride-Hailing Market

Xu Wei

Date: Tue, 04/03/2018 - 22:11 / source:Yicai
Ctrip Obtains License to Join Cut-Throat Competition in China’s Ride-Hailing Market
Ctrip Obtains License to Join Cut-Throat Competition in China’s Ride-Hailing Market

(Yicai Global) April 3 -- After Beijing Sankuai Online Technology Co., operator of China’s on-demand services giant Meituan-Dianping, unveiled its online ride-hailing service in Shanghai, Ctrip.Com International Ltd. has also joined the competitive field to seize market share.

Ctrip has obtained a license from Tianjin’s transportation commission on March 28 to offer car-hailing services, it announced today. Ctrip will start offering car-hailing services across China, news site The Paper reported.

Ctrip started to establish a ride-hailing platform in 2015 to tap into the competitive market. It trialed its services over the past three years to gain experience.

The online car-hailing market has substantial potential, but competition has shifted from subsidy to service quality and users tend to pay for good services, said Li Qiao, CEO of Ctrip’s ride-hailing unit. Continuously offering subsidies will affect service quality and users’ perception, Li suggested.

As of last year, the number of users accessing China’s ride-hailing services had reached 225 million, showed data from the ministry of transport. In contrast, there were only 100,000 drivers who obtained a license to engage in online car-hailing business. There is a serious driver shortage in the market.

To provide users with consistent services, Ctrip’s car-hailing service will adopt the strictest standards across China as required by the relevant rules, Li added.

As a new entrant, Ctrip will have to compete with the big market players such as Didi Chuxing, run by Beijing Xiaoju Technology Co. Didi secured a market share of over 90 percent after acquiring Uber Technologies Inc.’s China business in 2016. Meituan-Dianping also recently announced its entry into the ride-hailing market to compete with Didi Chuxing.

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Keywords: Ctrip, Meituan, Didi Chuxing