Didi Dache and Kuaidi Dache, China's two most popular taxi-hailing mobile applications which merged last month, announced on Saturday they will offer 1 billion yuan ($161.2 million) in further subsidies to promote their car-hiring business.
The two car-hailing apps are trying to promote their car-hiring services Kuaidi One and Didi Zhuanche by offering coupons to offset the minimum charge, according to a statement the two apps posted on their Sina Weibo accounts over the weekend.
Didi Dache provides the coupon in 30 cities while Kuaidi Dache offers it in 46 cities, the statement said, noting each user can enjoy two coupons per day.
The two platforms sent subsidies to customers and drivers to boost the use of their taxi-hailing services and they claimed they would continue this when they announced their merger on February 14.
The subsidy campaign is expected to attract more users to the car-hiring services, Ye Yun, PR director of Kuadi said, noting there are still many people who are not aware of the services as a new transportation choice, news portal cnr.cn reported on Sunday.
Car-hiring service is a promising sector since it meets customers' need, Zhao Zhanling, legal counsel of the Internet Society of China, told the Global Times on Sunday.
"I took Didi Zhuanche last week when I could not get a taxi during rush hour," said Li Xiao, a 28-year-old Beijing resident.
With a 15 yuan coupon, the cost was almost the same as a taxi fee, but the service is better, since bottled water and tissue are provided in the car, she told the Global Times on Sunday.
However, the sector has attracted some controversy and faces issues.
Car-hiring platforms such as Kuaidi and Didi cooperate with car rental companies but these companies have a limited number of cars and the firms are banned from hiring private cars, according to Zhao.
Yang Chuantang, minister of transport, told the media on March 12 during the annual session of the national legislative body that "private cars can never be used for car-hiring services" due to safety concerns.
However, the concerns can be addressed by setting up regulation standards and a registration system for private car owners who want to join car-hiring services and the participation of insurance companies can also make it a safer service, Zhao said, noting a "permanent ban" on private cars will severely jeopardize development of car-hiring services.
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