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Merged taxi-hailing apps vow continued credit promotions

Xinhua, February 25, 2015 Adjust font size:

Chinese taxi-hailing apps Didi Dache and KuaiDi Dache have promised that they will continue to give out free credit to passengers and financial incentives to drivers despite their merger.

The two tied the knot on Valentine's Day, raising monopoly concerns and fears the former rivals will abandon these expensive promotional policies.

In a joint statement issued on Wednesday, however, the companies said the "subsidies" will continue for their respective customers and registered drivers "in the long run", and that they are experimenting with other similar deals.

"Subsidies have effectively boosted our businesses in the past year, and we will stick with the marketing strategy in the future in various forms," said the statement.

The Chinese equivalents of taxi-hailing application Uber, Didi and KuaiDi allow passengers to find taxis closest to them by using the GPS system on their smartphones. Once a driver accepts a taxi-hailing request, he comes to pick up the passenger, who then pays via a third-party platform embedded in the apps.

Launched in 2012 in Beijing and Hangzhou respectively, Didi and KuaiDi later became rivals. The two firms announced a merger on Feb. 14, with each retaining their own brand and business.

Before the merger, they had battled for market share by awarding both passengers and taxi drivers huge incentives. In return for using the apps, passengers can receive credit to be used for future taxis. Drivers can also receive money if they use the apps to pick up passengers, prompting many to register under both brands.

In the first six months of 2014, Alibaba-backed Kuaidi's "subsidies" amounted to 1 billion yuan (around 163 million U.S. dollars), while Didi, supported by another Internet giant, Tencent, spent 1.4 billion yuan on the promotions.

Wednesday's statement did not disclose the size of future investments.

Kuaidi held a 56.5-percent share of China's taxi-hailing app market and Didi a 43.3-percent share as of December, according to research consultancy Analysys International. Endi