Ride-Hailing, Food-Delivery Giants Get Into Each Other’s Business

Ride-hailing giant Didi Chuxing Technology Co. Ltd. has moved into the takeout delivery business, encroaching on the turf of online services company Meituan-Dianping, which itself just got into ride-hailing.

Didi is seeking both full-time and freelance deliverymen, with the full-time position offering a minimum monthly wage of 10,000 yuan ($1,575), according to a job vacancy advertisement posted online on Thursday.

The takeout service, which will first be available in Wuxi, Jiangsu province, will expand into other Chinese cities in the coming months, a Didi spokesman told Caixin.

Didi’s move came after Meituan-Dianping, one of the country’s largest online services firms, announced that it would expand its ride-hailing service into more cities.

Didi — which has become the country’s undisputed leader in the ride-hailing industry after a merger with Uber’s China business in 2016 — reacted to Meituan’s move by offering new subsidies to drivers.

The company launched a subsidy program in seven Chinese cities, including Shanghai and Beijing, allowing selected drivers to purchase a new membership card that allows them to receive extra monthly pay, Caixin has learned.

Experts believe Didi’s response has “rekindled the subsidiary war” in China’s ride-hailing industry.

However, it is expected to be challenging for Didi to enter the unfamiliar food takeout business, which has been a fiercely competitive area.

As of the fourth quarter of 2017, Ele.me held 55.3% of the market, followed by Meituan Dianping, which had a market share of 41.3%, according to market data and research firm iiMedia Research.

Caixin learned this week that Alibaba Group Holding Ltd. is in talks to buy the remaining stake of Ele.me — in a move that is expected to further complicate the market.

Alibaba is already a large stakeholder of Ele.me, which obtained a $1.25 billion investment in 2016 from the e-commerce group and its fintech affiliate Ant Financial Services Group.

Contact reporter Mo Yelin (yelinmo@caixin.com)