Car-pooling firms Hellobike, Dida Chuxing to update service after government warning for allowing drivers to profit
- Hellobike and Dida Chuxing have made changes to their car-pooling platforms after the Ministry of Transport accused them of offering ride-hailing services
- The government distinguishes between ride-hailing and car-pooling, which limits what drivers can charge to transport costs like fuel
Chinese car-pool service providers Hellobike and Dida Chuxing said that they will modify their platforms after receiving a government warning, led by the Ministry of Transport, for suspicion of “engaging in online ride-sharing business in the name of car-pooling”.
In separate statements on Thursday, Shanghai-based Hellobike and Beijing-based Dida Chuxing said that they will “rectify” operations, ensuring that their car-pool drivers will not be able to monitor the orders of nearby riders and change their routes to accommodate them.
“Profile photos show a user’s gender information, and there are hidden security risks in offering long-distance, intercity services,” the Ministry of Transport said in its statement on Tuesday. “The platforms should amend the car-pooling services to eliminate security risks.”
In China, car-pooling and ride-hailing are distinct services. The government defines ride-hailing as a commercial activity, whereas car-pooling is a supplemental service that might be offered by a driver headed in the same direction as someone requesting a ride. National regulations require the price of a car-pool service to be limited to costs of travel, such as fuel and tolls. Local governments also limit the number of car-pool trips a driver can offer each day.
Dida said in a statement that it does not allow car-pool drivers to use its service for profit.
“Dida Chuxing has changed the ‘nearby order’ function to a ‘temporary route’ for drivers, so they can only put in their travel information in advance and the system will quickly match passengers en route,” the company said.
Didi ponders return of controversial Hitch service a year after two passenger deaths
In a statement to the Post, a Hellobike spokeswoman also noted changes the company made to its app.
“In an earlier version, we notified drivers about nearby orders to make it more convenient for them because the car-pooling service is always in demand,” the spokeswoman said. “But of course we made it clear that the price of car-pooling is only half that of ride-hailing.”
JD.com-backed Dida and Hellobike – backed by Ant Group, an affiliate of South China Morning Post‘s parent company Alibaba Group Holding – trail far behind their larger rival Didi Chuxing. Hellobike’s 16.4 million active car-pooling users and Dida’s 5.6 million are a fraction of the 53.3 million people using a similar service from Didi, according to report from research firm Analysys published in April.
Since the controversy, China’s car-pool market has fallen precipitously, from 23 billion yuan (US$3.5 billion) in 2018 to 10 billion yuan in 2019, according to the Analysys report. However, it was projected to climb to 15 billion yuan by 2022.
