The use of ride-hailing apps is declining in China as operators scale back incentives for drivers, contributing to the slowdown in vehicle sales in the world’s biggest auto market, Sanford C. Bernstein & Co said in a report yesterday.
Total daily active usage across ride-hailing apps in the third quarter of this year fell 6.3 percent from a year earlier, marking a fifth consecutive quarterly drop, Bernstein said, citing TalkingData figures.
Didi Chuxing (滴滴出行), which accounted for 93 percent of total daily active users in the past 12 months, saw rider and driver app usage slide by 5 percent and 23 percent respectively, the report said.
“Driver density is a key determinant of user wait times and the perceived convenience ride-hailing services offer,” Bernstein analysts, including Robin Zhu (朱鑌), wrote. “The simplest explanation for declining driver usage is the lower incentives paid by the ride-hailing platforms, and the meager levels of take-home pay drivers stand to make once costs like fuel, maintenance and vehicle depreciation are deducted.”
The report highlighted Didi, saying that the world’s biggest digital hailing service blamed driver incentives as a main reason for losses of about 11 billion yuan (US$1.6 billion) last year.
“Were Didi’s efforts to reduce losses what’s impacted driver numbers? Could the ride-hailing industry be ‘disrupted’ by the lesser availability up of cheap capital, before it can ‘disrupt’ car ownership?” it said.
Making money from ride-hailing is difficult given the challenges operators face in differentiating the service of getting people from A to B in relative safety and comfort, the report added.
To counter the contraction, automakers might beef up ride-hailing services of their own electric vehicles (EV) to help boost sales and meet EV credit requirements, it said.
Separately, China raised its 2025 sales target for electrified vehicles as the government tries to spur an industry that is showing signs of slowing down.
The country wants about 25 percent of new vehicles sold by 2025 to be electrified, according to a draft policy published on Tuesday by the Chinese Ministry of Industry and Information Technology.
Its last road map on the industry announced in 2017 called for new energy vehicles — all-electric, fuel-celled and plug-in hybrids — to make up more than 20 percent of vehicle sales by 2025.
Although demand for electrified vehicles rose rapidly in the past few years in China, they still only account for a about 5 percent of auto sales in the country.
EV sales have been dropping for four consecutive months after the government scaled back subsidies.
China’s auto market is experiencing a prolonged slump that has dragged down the global EV sector, as the country accounts for about half of the world’s sales of electric vehicles.
Taiwan’s exports soared 56 percent year-on-year to an all-time high of US$64.05 billion last month, propelled by surging global demand for artificial intelligence (AI), high-performance computing and cloud service infrastructure, the Ministry of Finance said yesterday. Department of Statistics Director-General Beatrice Tsai (蔡美娜) called the figure an unexpected upside surprise, citing a wave of technology orders from overseas customers alongside the usual year-end shopping season for technology products. Growth is likely to remain strong this month, she said, projecting a 40 percent to 45 percent expansion on an annual basis. The outperformance could prompt the Directorate-General of Budget, Accounting and
The demise of the coal industry left the US’ Appalachian region in tatters, with lost jobs, spoiled water and countless kilometers of abandoned underground mines. Now entrepreneurs are eyeing the rural region with ambitious visions to rebuild its economy by converting old mines into solar power systems and data centers that could help fuel the increasing power demands of the artificial intelligence (AI) boom. One such project is underway by a non-profit team calling itself Energy DELTA (Discovery, Education, Learning and Technology Accelerator) Lab, which is looking to develop energy sources on about 26,305 hectares of old coal land in
Netflix on Friday faced fierce criticism over its blockbuster deal to acquire Warner Bros Discovery. The streaming giant is already viewed as a pariah in some Hollywood circles, largely due to its reluctance to release content in theaters and its disruption of traditional industry practices. As Netflix emerged as the likely winning bidder for Warner Bros — the studio behind Casablanca, the Harry Potter movies and Friends — Hollywood’s elite launched an aggressive campaign against the acquisition. Titanic director James Cameron called the buyout a “disaster,” while a group of prominent producers are lobbying US Congress to oppose the deal,
Two Chinese chipmakers are attracting strong retail investor demand, buoyed by industry peer Moore Threads Technology Co’s (摩爾線程) stellar debut. The retail portion of MetaX Integrated Circuits (Shanghai) Co’s (上海沐曦) upcoming initial public offering (IPO) was 2,986 times oversubscribed on Friday, according to a filing. Meanwhile, Beijing Onmicro Electronics Co (北京昂瑞微), which makes radio frequency chips, was 2,899 times oversubscribed on Friday, its filing showed. The bids coincided with Moore Threads’ trading debut, which surged 425 percent on Friday after raising 8 billion yuan (US$1.13 billion) on bets that the company could emerge as a viable local competitor to Nvidia
RSS