Didi Chuxing and Uber China announced merger on Aug. 1, 2016. (Photo/Chinanews.com)
(ECNS) -- Following its merger with Uber China, homegrown ride-hailing firm Didi Chuxing is well poised to command further domination of the market in the world's second-largest economy, drawing concerns over its abuse of the position, warned an opinion piece by the Beijing Times.
In exchange for its China business, Uber will receive a stake of almost 18 percent in Didi to become its largest shareholder, while Didi will hold a minority stake in Uber.
Cheng Wei, founder and CEO of Didi Chuxing, said the ride-hailing service will continue providing discounts to users who benefited during previous price wars between these fierce competitors.
Although Chen promised the user discounts will exist for a long time, the opinion piece is concerned that the deal may mean Didi Chuxing is now in a better position to adjust its marketing, including raising prices to make up for its heavy spending in the past.
As China finally approved qualified private cars and drivers to provide services in the booming ride-hailing sector, incentives to attract drivers or passengers have declined. Other players in the sector, including Shenzhou Zhuanche and Yidao Yongche, also pose little threat to the market dominance of Didi Chuxing.
From a policy perspective, if Didi Chuxing and its old rival exchange data on Chinese users in future and explore the overseas market by using this massive data set, it's possible that the market leader would face more regulation, the article added.
The opinion piece called for supervisors to be cautious of potential risks following market change and prevent a monopoly, while ensuring public interests are well protected.
