Chauffering services have become popular in China with a potential for 10-fold growth, but the sector needs a legal framework and clear government regulation to ensure its development, according to the China Economic Net.
The report said that an increasing number of enterprises are getting into the ride-hailing services as the public is getting accustomed to using mobile apps for car service. Didi Kuaidi, a homegrown leader in taxi-hailing apps, has shifted to private-car service apps such as its Kaudi One smart app, providing licensed private car-hire services.
In January, Car Inc. (CAR), the country's largest auto rental service provider, also entered into the chauffeuring service market, partnering with UCAR Technology, a leading chauffeur car service firm, with services equivalent to taxi fares.
Statistics released in mid-August by Analysys International indicated that Didi Kuaidi led with its private car services covering 110 cities as of the end of July, followed by Yidao Yongche with 88 cities and CAR with 66 cities.
The same data also showed that CAR ranked first in the second quarter of 2015, at 66.7 percent in average month-on-month retention rate of active users, followed by Uber with 61.6 percent and Didi Kuaidi 59.6 percent.
CAR and Uber apps users were also found to have higher monthly income, with 33.5 percent of the former and 31.8 percent of the latter recording a monthly income of over 12,000 yuan ($1,900).
Liu Ching, president of Didi Kuaidi, said that online taxi-haling and private-car service markets have large room to expand 10- to 15-fold in the country with the improvement in mobile technologies and rising penetration rate for Internet services.
Private car drivers, who can earn 20,000-30,000 yuan ($3,140-$4,710) a month due to the high subsidies given to them, are among the largest beneficiaries from the thriving chauffeuring service market. Because of this, even corporate bosses, social elites, reporters and brokers work to serve as paid drivers for private cars, the report added.
The report said that five central government units, including the Ministry of Transportation, the Ministry of Public Security and State Internet Information Office, have met with car-sharing app providers Didi Kuaidi, Uber China, CAR and Yidao Yongche in the past months, asking them to produce measures to address illegal operations.
Based on government regulations, only government-licensed cars for rental are allowed to engage in commercial operations and franchised private cars are not. According to market insiders, service providers should therefore first legalize their franchised private cars.