Chinese OEMs pile into ride-hailing market in challenge to Didi
Jul 24, 2019
T3 Chuxing, a Chinese ride-hailing platform developed by three state-backed automakers, on Tuesday launched its business in the eastern Chinese city of Nanjing, in what many see as the most significant challenge yet to ride-hailing giant Didi’s near-monopoly over the industry.
Why it matters: T3, comprised of FAW, Dongfeng Motor, and Chang’an, are joining the hordes of Chinese car manufacturers flocking to the ride-hailing market, a component of the growing shared mobility sector, in an open challenge to market leader Didi Chuxing.
- Last month, state-backed GAC Group launched a ride-hailing platform named OnTime in Guangzhou with immediate plans to expand into the Greater Bay Area, following the launch of Xiangdao, Chinese largest automaker SAIC’s mobility service.
- So far at least 20 companies, including Geely, Shouqi, and BMW, are offering ride-hailing in China.
Details: T3 will expand its ride-hailing service to six major Chinese cities including Chongqing and Wuhan by year-end, and further to most provincial capitals by the end of 2020.
- T3 Chuxing is a business-to-consumer model, operating proprietary electric vehicles with high-quality drivers hired and managed by the platform as opposed to rivals which primarily use self-employed drivers, said the company.
- The company said that it will not charge extra fees during peak times, and all the drivers on its platform will be strictly in compliance with government regulations.
- It also plans to initially offer “a fair number of subsidies” for user acquisition, but has said that burning cash will not happen since “that would be stupid behavior,” Caixin cited Cui Dayong, CEO of T3 and a former executive at FAW, as saying.
- Backed by Chinese internet giants including Suning, Alibaba, and Tencent, T3 has said that it will lead the market in smart mobility by 2025, with an offering of more than 1 million cars and related services such as charging, maintenance, insurance, and car rental.
T3 was not immediately available to comment when contacted by TechNode on Tuesday.
Context: The Chinese mobility service market has grown at double-digit rates over the past several years, and is estimated to reach $656 billion by 2030, as is shown in reports from consulting firms McKinsey and PwC.
- Shifting into ride-hailing is how OEMs are responding to mass adoption of driverless mobility; in fact, joining the ride-hailing industry will be critical as the broader mobility industry shifts, according to Cui.
“If automakers just produce vehicles and don’t offer services to consumers by that time, it would be a huge shock to the entire [auto] industry.”
—Cui Dayong, T3 Chuxing CEO