UCAR, the car-on-demand sector of UCAR Inc, launched a new consumer-to-consumer (C2C) platform on Thursday that allows qualified private drivers to carry passengers.
Experts said the move is positive as it will stimulate competition and accelerate standardization of the industry.
According to a statement UCAR sent to the Global Times on Thursday, the new platform, called U+, is accessible to all drivers in China as long as they meet certain company requirements.
When customers hire a car via the UCAR app, they can either choose a car managed by UCAR or one on the U+ -platform, the statement said. Currently, UCAR drivers are all hired on contract.
UCAR also said that it would never charge any commission on fees earned by drivers who use the service.
Wang Chenxi, an analyst at Analysys -International, said that most C2C car-on-demand service providers take a commission charge, so UCAR's free U+ platform will be of relatively great appeal to private drivers.
"UCAR's arrival will promote the size of the car-on-demand market in China," Wang said in a note she sent to the Global Times on Thursday.
Qi Xu, vice president of consulting firm Ctcnn.com Inc, told the Global Times on Thursday that the launch of U+ will intensify competition in the car-on-demand market, which is dominated by companies like Uber and Didi Chuxing, but it won't completely change the business structure of the car-on-demand market in China.
"UCAR's participation might force competitors to increase their promotional efforts," Qi said. "It will also speed up the launch of ride-hailing regulations."
He said that although Didi and Uber have big shares of the car-on-demand market, the market itself is huge and there is great potential in third- and fourth-tier cities. Therefore, UCAR has opportunities in this fledgling industry.
According to UCAR's statement, UCAR has held onto a safe lead in the car-on-demand market in China, whether in terms of customer satisfaction or safety.
The statement also said the loss on each UCAR order has been falling to a very low level, and UCAR will soon reach the breakeven point.
UCAR CEO Lu Zhengyao said that the new U+ platform and UCAR are expected to "supplement each other."
"The objective of UCAR is to generate profits with its [business-to-customer] model, while U+ aims at boosting customer flow with its open C2C platform," he noted.
Qi said he agreed with such strategies as it's very hard for companies to make profits in the C2C business.
UCAR also said in the statement that it might pay subsidies to drivers who join the U+ platform in the future.
