Didi Kuaidi to expand to 400 cities within three months

A man uses taxi-hailing app Didi Dache on his smartphone on a road in Guangzhou city, South China's Guangdong province, April 9, 2015. [Photo/IC]

Didi Kuaidi, China's largest mobile-based ride-on-demand service provider, said it is expanding its private-car hailing services to more than 400 cities in the next three months, putting in place what it claims is the largest ride-sharing network in the world.

The private-car hailing service is already available in 259 Chinese cities, and profitable in 100 of those, including Xiamen, Fujian province and Linyi in Shandong province, said Stephen Zhu, its vice-president of corporate strategy.

"We hope to make the service available in 400 cities by Chinese Lunar New Year, in February 2016," he said.

"Our long-term goal is to provide car-on-demand services to 30 million people daily and have 10 million vehicles registered on our platform within three years."

The company's growth plan is being seen as aggressive but achievable by industry observers, especially after the firm had built a solid position in big cities.

Didi Kuaidi claims to have a 90 percent share of Beijing's private-car hailing market, processing more than 1 million daily requests from passengers－about eight times the number of total requests currently being made in New York.

Zhang Xu, an analyst with Beijing-based Analysys International, said that business in some of China's smaller cities will never be as thriving as it is in the major population centers.

"But to gain new growth momentum, Didi Kuaidi needs to penetrate more smaller cities and cover more people," he said.

The Ministry of Transport published a draft regulation in October that practically bans private cars from taking business using car-hailing apps.

But that has not stopped players from expanding their services while lobbying for more wiggle room within those guidelines before the final regulations are approved.

Just last week, Didi Kuaidi's rival Uber Technologies Inc also announced plans to ramp up its expansion in 2016.

The United States-based firm, which operates in 21 cities in China, said cities with more than 2 million people will be its main targets next year. There are at least 250 such cities in China.

Wang Xiaofeng, an analyst with Forrester Research Inc, said competition will be fierce as the two rivals battle it out for control of smaller cities.

"But I don't think it will be cutthroat. As far as I can see, Uber is not the kind of company to offer big cash incentives to grab users from Didi Kuaidi.

"Instead, it has been launching innovative marketing campaigns to build brand reputation, just as it has in the US," she said.

Figures from Analysys International show Didi Kuaidi still dominates China's private-car hailing market with 83.2 percent in the third quarter, leaving Uber a distant second with 16.2 percent.

Also on Tuesday, Didi Kuaidi launched a new service called 'Express Pool', which allows carpooling for passengers taking its 'Express' service, which it said was a way to improve drivers' income and lower travel costs.