Meituan challenges Didi with a new business model

06/06/2019

 

Meituan will distribute new services in Beijing and nine other cities

 

New ride services in 10 new cities for Meituan-Dianping, the ride-booking app that, having promised last month to try a new service model in multiple locations nationwide, has decided to make these new services available in new cities, including Beijing.

Today the Beijing-based company said it will continue to operate in Shanghai and Nanjing, where it began its adventure in the industry, and that it will expand to other cities such as Qingdao, Wuxi, Taiyuan, Dongguan, Foshan, Fuzhou, Xiamen, Dalian and Harbin.

 

The company said it would test the model in 15 pilot cities

 

As for the new business model, Meituan aggregates drivers from a multitude of ride-hailing apps to give passengers more variety and a better chance of hitching a ride without a long wait time. On May 19, the company stated that it would test the model in 15 pilot cities and invest money in developing the user experience.

But Didi still continues to grow, in fact he bought Uber’s operations in China in 2016 after a price war that cost billions of dollars, but even years later Didi has not yet made profits. Last year it lost around 10.9 billion CNY (1.6 billion dollars). Meituan hopes his new approach to operations will give him an operating advantage.

 

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