(Photo/GT)
Move may add pressure on taxis as travelers seek convenience
UCAR Group, backed by China's leading car rental company CAR Inc, on Sunday launched a free service that takes people to and from airports in 60 cities around the country, excluding Beijing.
The service is available for four consecutive Sundays, and it is free on trips that would otherwise cost 100 yuan ($16.10) or less, according to information on CAR's website.
The service is available in many large cities such as Shanghai, Guangzhou, Shenzhen and Chengdu, but Beijing has been "temporarily" excluded due to an insufficient fleet in the capital, an employee in UCAR's customer service center told the Global Times on Sunday on condition of anonymity.
The move in Beijing followed media reports that transport authorities in the city told UCAR's executives on Saturday that the service is illegal in Beijing.
The service allows drivers of rental cars to pick up customers, which is in violation of local regulations, the Xinhua News Agency reported on Saturday, citing the Beijing Municipal Commission of Transport.
Neither the Beijing authority nor UCAR could be reached for comment by press time on Sunday, but UCAR apologized on its Weibo account on Saturday night for the unavailability of the service in Beijing.
Zhao Zhanling, a legal counsel with the Internet Society of China, said the Beijing authority's decision is controversial and will not be copied by other cities.
"The service does not violate Chinese laws, as long as UCAR only offers rental cars. A car rental company cannot provide cars and drivers for car-hiring business," Zhao told the Global Times on Sunday.
He noted that unlike Beijing, other cities do not have such regulations, and Beijing is likely to change its stance in the near future, or the promising car-hiring service cannot develop smoothly.
Car-hiring services may mean huge changes for the domestic taxi sector, which has drawn many complaints from consumers over poor services and insufficient capacity, according to a report issued by leading domestic investment bank China International Capital Corp (CICC) in mid-July.
"Car-hiring is an industry trend and will likely have bright prospects as the country is expected to map out a more mature supervision system soon," Zhang Yi, CEO of Guangzhou-based market research firm iiMedia Research, told the Global Times on Sunday.
Car-hiring has yet to be completely banned by the country's top transportation regulator. Xu Yahua, deputy director of the transportation department of the Ministry of Transport, was quoted in media reports on Saturday as telling a forum in Beijing that the development of online car-hiring and taxi-hailing services can ease the burden of transportation in cities, but the involvement of private cars is not allowed.
Zhang said that Beijing's move will have little impact on the development of UCAR, but UCAR should be concerned about the fierce competition in the car-hiring sector.
This segment of transportation, which CICC estimates is worth 420.5 billion yuan, is crucial turf for online car service companies including Didi Kuaidi, backed by the country's tech giants Alibaba Group Holding and Tencent Holdings, and US-based ride-hailing service Uber.
Data from Beijing-based market consultancy Analysys International showed that Didi Kuaidi dominated the car-hiring market as of May with an 86.2 percent share thanks to its large user base. Uber came in second with 16.8 percent of the market, which it achieved by using its global operating experience. Targeting high-end businessmen and using the advantage of large fleets of vehicles owned by CAR, UCAR, which launched in January, ranked third with 8.3 percent.
As of the end of March, CAR, powered by US car rental company Hertz Global Holdings, had 69,067 operating vehicles, in comparison with 58,773 at the end of December 2014, according to the Hong Kong-listed company's financial report.
The company plans to add 35,000 new cars and invest 2.5 billion yuan for its UCAR business to attract new users in 2015, said media reports, citing a research note issued by Hong Kong-based Southwest Securities International Securities Ltd in late July.
