China’s Sharing Economy Worth $298 Billion

From ride-hailing business to online auctioneers， sharing economy platforms have created a market worth 1.95 trillion yuan （$298 billion） in last year， according to figures released by the National Information Center.

There are 50 million sharing business providers in China and they have more than 500 million consumers， according to a report by the center.

The sharing economy satisfies a variety of needs in daily life and business. In addition to taxi-hailing apps such as Didi， product， knowledge and service-based providers have mushroomed on the Internet， said Yang Yixin， deputy secretarygeneral of the China Internet Association， at a press conference issuing the report.

Zhang Xinhong， with the National Information Centers Information Research Department， said Chinas sharing econ-omy would grow at an annual rate of 40 percent in the next five years， and would take up more than 10 percent of Chinas GDP by 2020.

Taxi-hailing app Didi， the result of a merger between two separate startups in early 2015， raised tens of billions of US dollars last year from domestic and overseas investors.

Li Jianhua， chief development officer of Didi， said the hailing service received 1.4 billion calls in 2015， a figure Li expects to double by 2016.

The report forecast that in the next decade， five to 10 firms with similar value and influence as Didi will establish themselves in the sharing economy.

Uber-GAC deal to legitimize car-hailing service， boost sales

Chinese automaker Guangzhou Automobile Group is expected to become an investor in Ubers operations in China， in a move experts believe will boost the State-owned carmakers sales performance and help the car-hailing company win legitimacy.

“One of our subsidiaries is planning to take part in Ubers B-round of financing… negotiations concerned are underway so details are not being released for the sake of the interests of the parties involved，” GAC said in a reply on Dec 24， 2015 to an inquiry from the Shanghai Stock Exchange.

The inquiry came when GACs stock price experienced a rare daily limit increase on Dec 23， 2015， one day after the Shanghai-listed automaker announced a “comprehensive” deal with Uber that covers investment， sales， maintenance as well as financing and leasing.

Analysts said the cooperation would boost GACs performance in sales and after-sales services.endprint

“We believe that Uber will become an important sales channel of GACs cars and services，” said Wang Dean， an auto analyst at Pingan Securities.

“It is likely that Uber users will become GAC potential customers while GAC can authorize its dealerships to recommend Ubers car-hailing app to their customers. In addition， GAC can send messages about maintenance and used cars as well as car leasing to Uber users， helping steer online customers to offline stores.”

Uber entered the Chinese market in February 2014 and is now available in 22 cities. It said it has a 35 percent share in Chinas car-hailing market and will enter 100 cities in 2016， with the focus on those with a population of 3 million or more.

Despite the popularity of car-hailing apps， both Uber and its rival Didi were summoned in 2015 in Beijing and Shenzhen as they were suspected of organizing private cars for transport services.

Law enforcement officials earlier this year swept Ubers offices in several cities including Chengdu and Guangzhou， where GAC is headquartered.

Yale Zhang， managing director of Automotive Foresight， said Ubers deal with GAC might prevent similar incidents and help Uber further penetrate the local market.

“Guangzhou is one of Chinas four top-tier cities and it might serve as a strategic point for Uber to bargain about its legitimacy nationwide if it is well established in such an important city.”

Earlier this year， Uber co-founder and CEO Travis Kalanick said the company would seek Chinese investors and partners who know how to interact with the government and who can help localize Uber for the Chinese market.

At the November news conference， Liu emphasized the concept by calling the entity she oversees “China Uber” rather than Uber China.

It finished its first-round financing in September， during which the company received $1.2 billion from investors including Baidu.

Didi continues to lead Chinas private car hailing market

Chinese ride-hailing and sharing app Didi Chuxing continued to dominate the private car market in the third quarter of 2015 by both the number of active users and cities covered in China， data showed.

According to the latest report by consulting firm Analysys International， Didi owned 83.2 percent of Chinas existing active users for private car services in the third quarter of 2015.endprint

While its rivals， Uber， the US ride-hailing service company which has been expanding business in China， and CAR Inc， Chinas leading auto rental service provider， took 16.2 percent and 13.4 percent， respectively.

By the end of October， Didis private car service was available in 199 cities across China， while its rivals Yidao Yongche and CAR Inc cover 98 and 66 cities， respectively.

Didi has maintained a dominant market position since the launch of its private-car hailing business late 2014， according to the report.

Formerly known as Didi Kuaidi， the company has rolled out a wide variety of services that extend to online taxi-hailing， chauffeur， ride-sharing and bus-booking services.

Didi is currently valued at $16.5 billion after CEO Cheng Wei announced in September， 2015 the startup had secured its next round of funding -- to the tune of $3 billion.

Many thousands submit views on Chinas car-hailing services

Draft regulation seeks to integrate private cars into taxi management

The Ministry of Transport concluded soliciting public opinion in preparation for drafting regulations on app-based car-hailing services and a guideline about improving the development of the taxi industry.

The controversy between carhailing services and the traditional taxi industry is far from over.

Issued the end of last year， the draft regulation and guideline intend to integrate online car-hailing services into the taxi management system and raise the entry standard for drivers.

The drafts stipulate that drivers of private cars obtain a license certificate to offer rides for payment through car-hailing platforms.

Because the drafts concern the interests of many people， they have drawn a great deal of attention and discussion by the general public.

The ministry said it received 6，832 opinions. About 903 of those only showed support or opposition to the drafts， while 5，929 gave detailed opinions and suggestions.

The three most mentioned topics were all related to carhailing services， with 1，022 opinions on whether app-based car-hailing services should be managed and how.

In addition， 1，020 responses discussed the conditions and qualifications of cars and drivers that offer hailing services， and about 1，060 were related to things such as meters and identification of those cars.

“The reason for drafting the guideline and regulation is to ease traffic in big cities and improve taxi services，” China Newsweek quoted Liu Xiaoming， a senior official of the Ministry of Transport， as saying.endprint

“The purpose of reforming the taxi market is to serve the people，” Liu said.

Liu said the ministry encourages and standardizes the development of online taxi services. The two drafts are temporary policy. “Opening them for public opinion is to respect the will of the people and abide by the law， so the people feel ownership of our reform，” he said.

Wang Xiuchun， a taxi management official with the ministry， was quoted by Xinhua News Agency as saying the ministry hopes the pending changes will reduce taxi fees and improve drivers incomes， while also making taxis more attractive than private vehicles.

In the past， the ministry has several times taken a stand against private vehicles being involved in taxi services.

In China， most taxis are owned and managed by taxi companies. The drivers have to pay a high deposit for the vehicle and monthly franchise fees to the companies.

Companies can obtain taxi management franchises through a bidding process. After obtaining the franchise， the companies decide fees for their drivers， which are often considered exorbitant.

Since 2014， taxi drivers in several cities have protested that car-hailing services have taken their customers and lowered their already marginal profits. Many taxi drivers even quit the job and began working for carhailing apps.

“Many taxi drivers quit their jobs once the contract finished and now work for car-hailing platforms，” said Hu Zhanwu， 46， a taxi driver in Beijing. “I would like to do the same when my contract ends.”

Hu said he has to work 12 hours a day every day but only earns 3，000 yuan to 4，000 yuan （$470 to $627） per month.

Hu said drivers using car-hailing services can easily earn 5，000 yuan per month， working only eight hours per day， six days per week. “Much better than us，”he said.

According to Hu， taxi companies in Beijing charge monthly franchise fees of 6，000 yuan to 6，500 yuan for each taxi， and a deposit of 10，000-15，000 yuan.

“The companies only need one and a half years to pay back the cost of the car，” Hu said.

“Im sure that the government is trying to ensure better pay for taxi drivers. However， it will be very difficult as the companies are used to the ways they did things. They certainly will figure out ways to take advantage of the drivers，” Hu said.

Zhou Youxin， 40， a part-time Uber driver in Beijing， said the drafts are “not reasonable” and the ministrys policy is “far from reality”.endprint

“Beijing has had about 60，000 taxis since the 1990s， and now the number of taxis is more or less the same. But the population of the city has jumped a lot. The number of taxis simply cannot meet the needs of the people，” Zhou said.

Zhou said he wont register his car as a car-hailing vehicle if the draft becomes policy， as the vehicle license would only be valid for eight years. “It may be suitable for full-time taxis， but not for part-time car-hailing vehicles，” he said.

Xiao Xiong， 38， an advertiser from Beijing， thinks the vehicles offering hailing services should not be managed as taxis， as “the management ways of the taxi industry are far too old. The development of the industry is blocked by the interest groups.”

According to Xiao， car-hailing services are a part of a sharing economy. “It is environmentally friendly. The drivers can make the most use of their vehicles， and we dont need to add more cars on the road，” he said.

Xiao agrees with the draft that drivers should get permits to offer rides， and be under supervision for safety reasons.

Car-hailing app market revs up

Around one in four of Beijings more than 20 million population have their own vehicles. Despite the fact that the rate is still low compared with that in the United States， the more than 5 million cars have already driven down the average speed at rush hour in the mega city to 12 kilometers per hour.

With the improvement of peoples lives， a growing number of them will want to enjoy the convenience of travelling by car.

“Without further burdening the already crowded traffic， the solution to satisfy the demand is a sharing economy，” said Stephen Zhu， vice-president of corporate strategy at Didi Kuaidi， Chinas largest mobile-based ride-on-demand service provider.

Through Didis mobile application， passengers can easily book a ride from the nearest private car owners or taxi drivers.

Founded three years ago， Didi already has 250 million registered users and processed up to 10 million daily requests， which is about eight times the number of total requests currently being made in New York.

Earlier this month， it announced a plan to expand its private-car hailing service to more than 400 cities in the coming three months， putting in place what it claims the largest ridesharing network in the world.

According to Zhu， the private-car hailing service is already available in 259 Chinese cities， and is profitable in 100 of those， including Xiamen， Fujian province and Linyi in Shandong province.endprint

“We hope to make the service available in 400 cities by Chinese Lunar New Year， in February 2016，” he said.

Didi is not the only firm that has an ambitious expansion plan. Uber Technologies Inc， which is Didis major rival in Chinas car hailing market， also plans to penetrate into more cities in the country.

The United States-based firm， which operates in 21 cities in China， said cities with more than 2 million people will be its main targets next year. There are at least 250 such cities that fit that criteria in China.

Zhang Xu， an analyst with Beijing-based Analysys International， said that business in some of Chinas smaller cities will never be as thriving as it is in the major population centers.

“But to gain new growth momentum， companies needs to penetrate more smaller cities and cover more people，” he said.

Zhang said it is still too early to tell which company holds obsolete advantages in smaller cities. “Didi has a much bigger presence in China， but it doesnt means Uber has no chance at all.

In cities which Didi has already had operation， it may be easier for Uber to make some moves because Didi has already educated the market about what is car-on-demand service，” he said.

Figures from Analysys International show Didi Kuaidi still dominates Chinas private-car hailing market with 83.2 percent in the third quarter， leaving Uber a distant second with 16.2 percent.

What is for sure is that the competition in the future lies in the quality of service and whoever can provide better user experience will win， he added.

Wang Xiaofeng， an analyst with Forrester Research Inc， said there are still concerns in the regulatory areas.

The Ministry of Transport published a draft regulation in October that practically bans private cars from taking business using car-hailing apps.

“It is still a draft rule. But the earlier the final regulation released， the clearer we can tell the direction of the development of the car-on-demand industry，” she said.

Chinese car-hailing app Didi part of $500m funding for Indian peer Ola

Chinas ride-hailing and ride-sharing app Didi said that it was among a group of investors channeling $500 million into Indian ride-sharing app Ola.

The Chinese startup declined to specify how much it had invested to the fund that also featured backers including Baillie Gifford， Falcon Edge Capital， Tiger Global， SoftBank Group， DST Global.endprint

Didi said that it had an undisclosed amount of stakes in the Indian company， following a $100 million investment in Lyft， a ride-sharing service in the United States and $350 million joint investment in Grabtaxi in southeast Asia.

Alongside battling Uber in China， Beijing-based Didi has chosen to invest in Ubers rivals in other countries to compete globally.

Didi is currently valued at $16.5 billion after CEO Cheng Wei announced the startup had secured its next round of funding -- to the tune of $3 billion.

Didi Kuaidi launches bus service

Didi Kuaidi established itself as a one-stop ride-booking application in China by adding a bus service to its platform.

The service， the sixth in Didi Kuaidis product portfolio after taxi， premium private car， low-budget private car， driver and carpooling， has been undergoing trials to help office workers commute in Beijing and Shanghai since mid-July，2015.

Li Jinfei， head of the Didi Bus business unit， said the service has gained more than half a million users during Aug～Sep， 2015 and about 80 percent have become repeat users.

“In the next stage of development， Didi Bus will expand to new cities and invest more to open new routes so that more people are able to enjoy our service，” he said.

According to Li， apart from the daily commuting market， Didi Bus is eager to expand to more sectors to tap the hundreds of billions of yuan worth of bus travel in China.

According to Li， Didi Bus has already tested the water on tourism routes during the past National Day holiday.endprint