Since June, China’s largest ride-hailing service provider Didi Chuxing has been quietly increasing its price in several cities, Chinese media reported.
In late July, regulators solidified the legal status of ride-hailing in China, before Didi announced its acquisition of its biggest rival, Uber China. Although Didi said that subsidies will not stop, its users must now spend 20% more that before for a same ride.
Taking Beijing as an example, Didi’s price before this June was RMB 1.5 (USD 0.23) per kilometer and RMB 0.3 per minute; the price has risen to RMB 1.8 per kilometer and RMB 0.5 per minute, with a minimum spending per ride of RMB 8.
According to Sina Tech, several other cities also saw a price increase of 20% to 30%. In addition to regular rides, it costs a couple of times more during rush hours or under bad weather.
Drivers complain too. At first, a driver received an RMB 50 subsidy for completing every 10 rides in a day; now they have to complete 26 orders for any possible subsidy.
From another perspective, the ride-hailing market in China is very likely to have been distorted due to the cash-burning battle between service providers: Uber and Didi burned USD one billion (RMB 6.7 billion) and RMB 10 billion respectively in 2015 alone.
When users hail a car not simply because it is cheap but out of real needs, the ride-hailing market may expect a more healthy form of growth.
(Top photo from Pixabay.com)