Will Meituan be able to catch up and realistically compete with Didi Chuxing in China?

Meituan’s ride-hailing service is launching in Shanghai tomorrowwas written by Emma Lee for TechNode.

Chinese O2O and e-commerce giant Meituan is going to launch its long-rumored ride-hailing service tomorrow (21 March 2018) in Shanghai, Chinese media iFeng is reporting. The report says they have confirmed the news with Meituan’s customer service staff.

As a latecomer in a highly consolidated sector, Meituan is diving in with huge subsidy plans. In a previous marketing campaign, Meituan said they would launch ride-hailing service once a city gets 200k votes on its online poll. Under the rule, the first 200k passengers to register can get ride coupons.

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The customer service staff confirmed with iFeng that first 20k Meituan drivers in Shanghai can enjoy commission free service. For the rest of drivers who have made their votes, Meituan would collect an 8 per cent commission fee and an information fee of RMB 0.5 (US$0.08) for each ride.

Drivers who worked over 10 hours from 6:00 to 24:00 and processed 10 orders or more could get a basic income of RMB 600. If the daily turnover exceeds RMB 600 (US$95), drivers will get an extra bonus of RMB 200 (US$31).

Shanghai will be the second city for the company to launch this service after rolling out in Nanjing last year. Other cities that Meituan are launching Beijing, Hangzhou, and Chengdu.

While Meituan is spearheading forays into a sector that’s dominated by Didi, the ride-hailing giant is also working toward the launch of a food delivery service—one of Meituan’s core businesses, with aggressive food delivery rider recruitment plans.

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It’s a no-brainer that this would be a cash-burning battle between two of China’s most heavily-loaded tech titans. Meituan raised a $4 billion C round last October and Didi just announced its plans to raise US$1.5 billion in funding using asset-backed securities (ABS).

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