Caixin
BUSINESS & TECH

Latecomer Meituan Makes Foray into Online Car-Hailing Market

By Liu Xiaojing and April Ma

(Beijing) — China’s largest group-sales website, Meituan-Dianping, has discreetly rolled out an online car-hailing service — a bid by the latecomer to seize new opportunities in a market recently streamlined by stringent regulations.

Meituan, best known as an online directory and deals platform for restaurants and local services, began testing the water in Nanjing on Tuesday with an online ride-booking service embedded within its app.

The firm decided to make inroads into car-hailing as it noticed the demand for rides taking users to nearby businesses and restaurants with deals found through its app, a company spokesperson said.

Sources familiar with the matter told Caixin that while Meituan’s foray into ride-booking is tentative at this stage, the company is still considering different operational possibilities in different cities, such as recruiting its own drivers or working with existing ride-hailing platforms.

Meituan is in the process of applying for an online car-hailing license, a requirement for firms outlined in new national regulations in November that have ramped up the operational threshold for the dynamic but unruly sector.

Local interpretations of these regulations have banned allowing non-local residents to pick up passengers through platforms in large cities such as Beijing and Shanghai.

The tougher regulations combined with a stark drop in driver-side subsidies have forced many drivers to leave platforms like Didi Chuxing, the largest player in the sector. This has led to a shortage of drivers and rides available to car-hailing users.

Meituan is tapping into a user base of nearly 200 million monthly users who book movies tickets or find group purchasing deals through the platform. The number of users is comparable to Didi’s user base of 300 million active users.

Users in Nanjing can access the new function, which has an interface similar to that of Uber, through a gateway on the app. At 1.8 yuan per kilometer, fares are about the same as Didi’s lower-end Kuaiche service, which employs private-car owners.

The function accepts payment through Tencent’s QQ Wallet and WeChat Pay but does not yet accommodate Meituan’s own third-party payment service, set up in September.

Contact reporter April Ma (fangjingma@caixin.com)

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