Meituan unites with small ride-hailing players to take on Didi

The company is doubling down to make sure eyeballs—and spending—stay on its app.

^

Meituan-Dianpin, the world’s largest food delivery service, has integrated three ride-hailing services into its app, 36Kr reported on Thursday.

Starting from today, Meituan’s users will be able to use the platform to hail a taxi or private ride in cities where Shouqi Limousine & Chauffeur, Caocao, and UCar operate.

Shouqi is a comparatively smaller company that offers rides mainly in first-tier cities such as Beijing and Shanghai, while Caocao and UCar cover 25 and 50 cities across China, respectively, according to information on the companies’ websites. Meituan-Dianping’s 2018 annual report shows that its car-hailing service was available in just two cities, namely Nanjing and Shanghai.

The company also disclosed that its “ride-hailing driver related costs” increased to RMB 4.46 billion (USD 662 million) in 2018 from RMB 293 million in 2017, which contributed to its total net loss of RMB 8.5 billion.

“We will improve the operational efficiencies and significantly narrow the operating losses of both our car-hailing and bike-sharing businesses, and strengthen their strategic synergies with the overall platform,” said Meituan in the report.

It acquired bike-sharing company Mobike in April 2018 to “better serve our users’ high-frequency short-distance transportation needs, increase the touchpoints of our platform to consumers, collect more location-based service data, and expand cross-selling opportunities with our other service categories.” That acquisition generated RMB 1.51 billion in revenue in the 2018 fiscal year, but made a huge loss of RMB 4.55 billion.

Meituan’s partnership with the three companies is a direct challenge to China’s largest ride-hailing service, Didi Chuxing, which operates in more than 400 cities in China as of the end of 2017. Recently, Didi has also taken its services abroad to Japan.

36Kr is KrAsia’s parent company.

Contact the writer at [email protected]