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China’s Merging Taxi Apps See Smooth Service Expansion, Plans Not Subject to Regulatory Review

| Feb 26, 2015 08:59 PM EST

With the absence of a regulatory review, users can now expect fast-tracked expanded services on cab-booking outlined by the merger of Kuaidi Dache and Didi Dache, two of China’s largest taxi-hailing apps.

The added services include carpooling, intercity buses and rides for individuals who are too drunk to drive.

Kuaidi Dache is backed by China's e-commerce giant, Alibaba Group Holding Ltd., while Didi Dache has Tencent Holdings Ltd. as one of its investors. The two firms agreed to merge earlier this February.

The deal, which was announced on Feb. 14, makes the two companies a taxi-hailing app giant as their merger will now secure 99 percent of the technology's market in the country.

According to a Wall Street Journal interview with Joe Lee, a co-founder at Kuaidi, the deal is expected to be sealed in the coming weeks.

Meanwhile, for two of China's most powerful players in the Internet industry, Alibaba and Tencent, the unison of the taxi-booking apps paves the way for more services wherein digital payment systems via mobile gadgets can be employed.

Lee also announced that the merger will continue using both Alibaba's and Tencent's payment systems.

The upcoming merger has earned issues on monopoly as raised by another competing player in the industry. A rival company earlier filed a complaint before China's Ministry of Commerce. However, the ministry is yet to receive a declaration about the merger.

As a response, Kuaidi spokesman Ye Yun emphasized that they are not required to submit such declaration. He stated that China's antimonopoly law provision requires only merging companies that reached a combined 2 billion yuan ($320 million) revenue ceiling to declare.

However, both Kauidi and Didi have declined to disclose the amount of their joint worth.

Ye also added that the merger will be beneficial to end consumers as more services will be launched once the deal is finalized.

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