A smartphone with Ride-hailing apps Didi Chuxing, Dida Chuxing and Cao Cao Mobility Photo: VCG

Chinese ride-hailing giant Didi Chuxing is facing rising competition as many of its drivers have migrated to its competitors who are heavily incentivizing drivers and riders in an attempt to snap back market share from the dominant player.

Industry insiders claim that the multi-billion-dollar Chinese ride-hailing market has entered an era of volatility after years of Didi Chuxing's dominance. Chinese riders welcome market competition as they are increasingly displeased with Didi's rising charges.

Recently, China's regulators have also moved to scrutinize how Didi handles its huge trove of sensitive data it has collected in the past few years, particularly data concerning detailed mapping and riders' privacy. 

Starting in July, many online ride-hailing platforms have ramped up efforts on issuing new bonus such as heavy discount of taxi fees and other incentives. For example, Alibaba-backed AutoNavi, or Gaode Map, is providing riders a 100-yuan taxi coupon for free, in addition to a discount. 

Meituan Dache, the ride-hailing app run by China's online food delivery giant Meituan Group that was re-launched on app stores in early July, following Didi Chuxing being barred from registering new users by the regulators, is also providing 10-yuan coupon for existing users every time they invited a new user to place an order through Meituan's app platform.

With the escalation of the current ride-hailing war in which service providers are battling it out for drivers and riders, some experienced drivers are garnering a considerable premium, industry insiders have said.

As of Thursday, new drivers will enjoy free commission for the first three orders each day for seven consecutive days, after receiving the coupon card from Didi's rival platforms, media reported.

In addition, from July to September, drivers who accept rides between 7-9 am on weekdays will not be charged with any commission, and all the income goes to the drivers' pocket.

Other ride-hailing platforms such as AA Chuxing and Meituan Dache are also providing similar favorable packages in a bid to draw drivers from Didi Chuxing.

A full-time ride-hailing driver surnamed Liu in Beijing has started taking orders from the new platforms a week ago, squeezing time used to spend on Didi Chuxing.

"Now many Didi drivers around me have switched to AA Chuxing lured by its higher service payback, and most importantly, they do not charge any commission from drivers at the moment, with additional rewards during peak commute time," Liu told the Global Times on Tuesday.

But Liu said that he won't discard Didi's platform for the time being, because the platform remains the largest and owns more users, ensuring a stable income.

Another full-time driver with Didi Chuxing surnamed Zhou said he was also bombarded with text-message invitations from other rival platforms.

Zhou complained that Didi has many 'unfriendly' policies for drivers like him. For example, Didi takes about 25 percent of the turnover, which means 25 yuan for a 100 yuan payment from a passenger, which Zhou said is too excessive.

Also, if a Didi Chuxing driver wants to go home after work, they will set directions on the navigation on the platform, but the platform will deduct an additional 10 percent of that single turnover, the driver said.

However, facing heightened regulatory pressure now, Didi is dangling more incentives and bonuses so that drivers won't leave.

A driver with Didi's subsidiary app Huaxiaozhu told the Global Times that she has no intention to switch to other platforms yet, because Didi platform is more efficient in dispatching assignments to them in addition to higher bonus.

Didi Chuxing has a nearly 90 percent share of the ride-hailing market in Chinese mainland. According to the statistics of the Ministry of Transport, in October 2020, the total number of domestic online ride-hailing orders reached 624 million, and Didi Chuxing's order volume accounted for 562 million, media reports.

Didi ran into trouble after its app has been detected by the regulators for illegal collection and use of personal information in early July, days after its rushed stock listing in the US, and, the company's mobile apps have been ordered to be taken down from all app stores in China.

The ride-hailing business in the country has gone through a period of breakneck competition, fuelled up by huge capital both from home and overseas.

"Didi's dominant market share and early market layout can be an important factor for its initial success, but it is never a deciding factor, because the government and the public are set to investigate how the company will handle that huge amount of sensitive data it has collected," one industry expert said.

According to a recent report by the Internet Society of China, the overall transaction volume of China's ride-hailing market in 2020 hit 249.91 billion yuan, down 17.9 percent from 2019 due to the coronavirus shutdowns and social distancing. It has recovered since early 2021.