An advertisement of Kuaidi Dache taxi-hailing firm is seen on the exterior of a building in Beijing, Feb. 27, 2014. (Photo : Reuters )
China's two taxi-hailing apps, Didi Dache and Kuaidi Dache, are offering coupons to offset minimum charge in their car-hiring services Didi Zhuanche and Kuaidi One.
The subsidies offered by the two apps that merged last month amount to 1 billion yuan ($161.2 million).
The Alibaba-backed Didi Dache provides the coupon in 30 cities, while Tencent's Kuaidi Dache offers it in 46. Each user can enjoy two coupons per day.
Many people are not yet aware of the car-hiring services and the subsidy campaign was launched to attract more users, said Ye Yun, PR director of Kuaidi.
With a 15-yuan coupon, the cost was almost the same as a taxi fee, but with more perks such as bottled water and tissue.
But car-hiring platforms such as Kuaidi and Didi cooperate with car rental companies have been banned from hiring private cars.
Yang Chuantang, minister of transport, announced that "private cars can never be used for car-hiring services" due to safety concerns.
Only licensed drivers and taxi companies remained legal to provide such services. The apps using private fleets, like Kuaidi Dache, Didi Dache and Uber for profit are facing major setbacks.
The ban is a good news for car rental service companies like Zuche because it rules out potential unlicensed rivals to transportation business.
However, the concerns can be addressed by setting up regulation standards and a registration system for private car owners wanting to join car-hiring services, according to Zhao Zhanling, legal counsel of the Internet Society of China.
The involvement of insurance companies can also make it a safer service, Zhao added.
Zhao noted that a "permanent ban" on private cars will severely jeopardize development of car-hiring services.
