Ride-hailing services Didi Chuxing and Uber. [Photo/zol.com.cn] Qu Liqun, 40, is a "smart" Hangzhou cabbie－he has installed as many as four smartphones and an iPad in his taxi. The gadgets are neither for communicating with family nor for entertainment in motion. They are part of Qu's strategy to outsmart other cabbies, survive and thrive in China's fiercely competitive ride-hailing market. Hundreds of millions of Chinese now use smartphone apps to book rides. That ability is largely a result of the cash-burning war for market share that service providers such as Didi Chuxing and Uber waged until recently. Their war produced a country-wide awareness of their services. It also spawned a market now estimated to be worth billions of yuan. Not surprisingly, market share-minded ride firms offered heavy incentives to drivers registered on their apps. By mid-September, about 15 million drivers, including those running rented metered taxis and private car owners, registered as ride-providers on Didi alone, to work full-time or part-time, as per their convenience and needs. As for passengers, they too loved the apps because rides were much cheaper than regular taxis. Soon, regular taxi drivers began to seethe as their income began to plummet. Others such as Qu, the Hangzhou cabbie, improvised. "With more devices (in my taxi), I'll have a better chance of landing big-ticket orders." By that he means business travelers who book long-distance rides via apps. Business travelers, Qu said, are not price-sensitive. "They represent the only niche where traditional taxis still have an advantage. In the mainstream market, we can't beat individuals who register their private cars on apps such as Didi and offer cheap rides, which generate additional revenue for them in their spare time." Some commuters too are switching back to regular taxis as employers have stopped reimbursing receipts issued by ride-hailing firms. That's not the only bump on the road for the apps that symbolize sharing economy. They began emerging in China in 2012 and enjoyed a smooth ride until this year, which is proving to be a watershed. The Chinese government aims to boost sharing economy in a bid to improve the services sector, spur consumption and create jobs. But the rise of cab apps is seen hurting traditional metered taxis. Besides, it is feared a system without adequate checks and balances to filter out criminals seeking to be ride-providers, could endanger passenger safety, observers said. Earlier this month, several big cities proposed draft rules on the types of vehicles that can be used as taxis and ride-hailing vehicles, and specified who could drive them. Metropolitan cities, including Beijing and Shanghai, have proposed that only cars with a certain length of wheelbase could provide app-based rides. Observers think the proposed regulations could increase the cost of rides and hurt the emerging business, which has already attracted billions of dollars in investment. "The regulations practically allow only cars worth more than 200,000 yuan to provide rides, which could push the majority of existing cars off the road," said Xue Zhaofeng, a professor with the National School of Development at Peking University. A statement from Didi, China's largest ride-hailing service provider, said only one-fifth of its vehicles in Shanghai would meet the proposed requirements. Rides would become more expensive and less efficient due to shortage of stipulated vehicles, it said. But local governments think the new rules are necessary to tackle traffic congestion and air pollution.
Several metropolitan Chinese cities including Beijing and Shanghai have proposed legislation that observers believe will damage ride-hailing services. New regulations include a requirement that only vehicles valued over £25,000 may operate in these services, which could remove the majority of existing drivers, according to Xue Zhaofeng, a professor at the National School of Development at Peking University.