A New Tactic for Didi Chauffeured Car Services: Cooperate with Competitors

Gasgoo.com (Shanghai April 27th)- Didi announced yesterday that it signed a strategic agreement with Shanghai Haibo Taxi to start cooperation in chauffeured car services, with Haibo providing taxies and drivers and Didi in charge of front-end platform operation.

A trial for cooperation

It’s Didi’s first trial of cooperation with traditional taxies in chauffeured car services, a second way of legal operation. Reporters learn that Haibo will provide 500 taxies, mainly composed by Volkswagen Passat, to support Didi’s comfort, business and luxury models. The cooperation has been recognized by Shanghai Traffic Commission. Relevant officials say they hope the cooperation will bring more reform motivations and practices for the transportation industry. Data shows Haibo Taxi Company is one of the five biggest taxi companies in Shanghai, owning more than 10,000 unit taxies.

A trend for Integration

The cooperation has achieved resource complementarity for both sides, maybe predicting the future trend in the industry. Fu Qiang, Vice President of Didi said, Didi would like to share reforms brought by upgrading technologies and try new models to achieve better cooperation with traditional taxi companies.

One analyst believes that shorting of legal qualifications and taxies is a big obstacle for chauffeured car services, while technology threshold is also a problem for traditional taxi companies. The cooperative operation will benefit both sides.

Effects remain to be seen

However, some analysts believe the difficulties of copying the cooperative mode and spreading it to the whole nation are still high. Even though cooperation is the most effective way, many traditional taxi companies have conducted chauffeured car services by themselves and the desire to cooperate is not strong.

Reporters learn that Shou Qi, Xiang Long in Beijing have launched self-operated chauffeured car services last September. Da Zhong, Qiang Sheng also starts business in this area.

Besides, some analysts say the chauffeured car services market has a relatively low entering threshold, which may cause fierce competition in the future.