Internet Plus Ride-Hailing

Car-hailing apps are thriving in China. According to Chinese Internet research institution CNIT， the U.S. ride-hailing company Uber and its Chinese counterparts Didi Chuxing， Yidao Yongche and Shenzhou Special Car Service are the four largest ridehailing companies in China.

Apple Inc.s recent $1-billion investment in Didi has far-reaching implications. On one hand， Apples investment will drive Didis development and increase its market share； on the other hand， Apples apps may be added to Didis platforms as well as the Apple Pay service.

The online car-hailing market fuses the Internet with car-sharing services. Two categories exist in China： One is the customer-to-customer model employed by Didi Chuxing and Uber， whereby private car owners service individual customers； the other is the business-to-customer model used by Shenzhou Special Car Service， where car-hailing companies purchase cars and recruit drivers to provide car-hailing services.

Chinas large population provides a vast market for car-hailing services. In the meantime， as online car-pooling services are more convenient than traditional taxis， an increasing number of passengers are switching to such services. A lot of taxi drivers have also adopted online car-hailing services to attract more customers.

Many car-hailing platforms have provided generous subsidies for drivers and passengers in order to promote their services. However， the new services have encountered multiple issues in their fledgling development. First， they have been met with resistance from taxi companies in many locations for destabilizing their business and encroaching upon their profits. Second， as drivers providing online car-hailing services may not have been formally trained， passenger safety cannot be guaranteed. As a result of the aforementioned problems， some local governments have banned online car-hailing practices.

Nevertheless， the Central Government supports the online car-hailing industry. In March， 10 central government departments published a guideline on boosting green consumption， which vowed to fuel the emergence of a sharing economy， encourage effective use of idle personal resources， and promote the development of online carpooling and private car rental services in a well-regulated manner.

Online car-hailing services exemplify Chinas Internet Plus strategy—the application of information technology in traditional sectors. Local governments should encourage such practices and subject them to government supervision. Banning them with administrative means would only kill a promising new industry.