Didi to Relaunch Infamous "Hitch Ride" Service

Source: FT.com

Chinese ride-hailing group Didi Chuxing plans to relaunch its contentious Hitch carpooling tool, potentially buoying the lossmaking start-up as it faces new competition at home and large capital demands for its robo-taxi business and international expansion.

Hitch will be relaunched on a trial basis with tighter restrictions for women passengers. The service was halted last year after the murders of two female passengers. In a subsequent damning investigation, Chinas transport ministry said that SoftBank-backed Didi had lost control of its drivers and vehicles and suspended its carpooling service indefinitely.

Didi on Wednesday said it had reported the trial launch to regulators, an indication that Chinese authorities had signed off on the pilot programme. Hitch will resume daytime operations at the end of the month in Beijing, Harbin and five other cities.

Didi will put in place new restrictions that limit the trial Hitch rides to under 50km, and permit women passengers to ride only from 5am to 8pm. Men can continue sharing rides until 11pm.

When Hitch was in operation last year, carpooling contributed about one-tenth of Didis revenues, according to analysts. The service allows drivers to pick up additional passengers along their route, reducing fares a service similar to UberPool, which attracts cost-conscious commuters.

Carpooling is cheap and the demand is large, and there are very few services available in the market, said Naomi Sun, a mobility analyst with Analysis.

But Didi is also under increasing scrutiny from consumers, she said. Didis active users account for 90 per cent of the whole industry. As the absolute leader, customers naturally have higher expectations and demands of them, Ms Sun said.

The restrictions for the Hitch pilot relaunch come on top of a slew of safety measures the company introduced last year. Didi updated its app so that passengers could more easily share their routes with friends and alert police in case of an emergency. It also began recording audio during rides.

Didi was valued at $56bn earlier this year and claims 550mn users worldwide but it has struggled to turn a profit. In August it spun out its autonomous driving unit and is reportedly seeking more investor cash to fund its growth.

Hitch service is a good income with very low costs, said Will Tao, an independent tech analyst and former director of analysis at iResearch. A lot of car manufacturers are working closely with local governments to develop their own car hailing platforms, which poses challenges to Didis growth.

Among the new rivals are apps backed by Chinas homegrown automaker Geely, state-owned carmaker FAW Group and Chinese everything app Meituan Dianping.

In 2016, Didi swallowed Ubers China operations and took control of the countrys ride-sharing market after an expensive fight with the US ride-hailing group.