Bike-Sharing Firm Challenges Didi with Cab-Hailing Service

Chinese bike-sharing firm Hellobike has launched ride-sharing services in three cities in a direct challenge to sector giant Didi Chuxing.

Hellobike, known for its signature blue and white bikes, has added a new cab-hailing function to its mobile app for users in Shanghai, Nanjing and Chengdu, the Shanghai-based company announced on Friday.

The move comes one month after the company renamed itself Hello TransTech — or HelloChuxing in Chinese — as part of an expansion into other transportation services.

“We hope our platform can meet any user transportation demands, ranging from bikes, cabs and car-hailing,” said a Hellobike spokesman, citing an earlier media interview of the company’s CEO, Yang Lei.

Founded in September 2016, Alibaba-backed Hellobike is a relative latecomer to China’s once-booming bike-sharing business, currently led by Mobike and Ofo. Hellobike has become the sector’s third largest player thanks to its strategy to focus on the smaller Chinese cities which the sector’s leaders tend to neglect.

Its ambition to become a transport services provider for both bikes and cars comes at a time when China’s investment-driven bike sharing sector is struggling to stay independent and find a sustainable business model.

In April, Mobike announced it would become part of China’s largest online services platform, Meituan Dianping, in a $2.7 billion deal. It is regularly rumored that cash-strapped Ofo is about to be acquired by Didi, which both companies deny.

However, Hellobike’s drive into the ride-hailing market also comes as the sector faces increasing regulatory scrutiny in the wake of the deaths of two passengers killed by Didi drivers while using the service.

Didi currently has more than 80% share of China’s ride-hailing market, according to Bain & Co., a Boston-based consultancy.

Last month, Meituan — which launched a high-profile subsidy program to challenge Didi — said it would scale back expansion of its ride-hailing offerings to Chinese cities other than Shanghai and Nanjing.

HelloBike said last month it had signed partnerships with transportation services providers, including Auto Navi Maps, owned by Alibaba Group Holding Ltd., and two smaller ride-hailing companies, Dida Chuxing and Shouqi.

Contact reporter Mo Yelin (yelinmo@caixin.com)