Carpooling is heralded to be environmentally friendly and money-saving, but in smog-stricken China, the transportation option became a source of public concerns after two female passengers got murdered during their lifts with Didi Chuxing drivers. The ride-hailing app has suspended its Hitch service to this date under government command, and its peers were also directed to step up safety measures for their own businesses.
The regulatory crackdown led to a shortage of cheap rides with strangers in China, but a newcomer is charging full speed ahead to reinvigorate the market. Hello TransTech, formerly Hellobike, will officially launch its carpooling service nationwide on February 22 after piloting the program for about a month. The move sets up Hello for a clash with market dominator Didi, which has been in hot water following the high-profile incidents last year.
Hello declined to answer questions from TechCrunch about its new carpooling segment. However, it did release a few data points at its press event on Friday: The freshly minted offering is now served by more than 2 million drivers across 300 cities and has so far logged 7 million rides with “growth still going strong.”
Hello is relatively late to the ride-hailing game, but it’s got powerful backers who could potentially help it gain a meaningful foothold. Among its main investors is Ant Financial, the financial service company controlled by Alibaba’s billionaire founder Jack Ma and the creator behind one of China’s largest digital wallets, Alipay. Besides shelling out checks, Ant also sent many users to Hello TransTech when the latter first started as the bike-rental company Hellobike. For instance, Alipay’s hundreds of millions of users could easily access Hellobike without having to download its standalone app.
Hello’s carpooling feature similarly piggybacks off Alibaba services although the goal here is to assure passenger safety through processes like cloud-based real-name verification and facial recognition. Hello also says it’s actively working with public security departments nationwide to launch background checks on partnering drivers.
As the Chinese internet becomes occupied and colonized by tech heavyweights, teaming up with a major player almost becomes a prerequisite for aspiring startups to crack their market. Another case in point is Tencent being a boon to Didi’s early user acquisition by letting the ride-hailing app tap its popular WeChat messenger app and payments service.
Alibaba’s transportation ambition is a two-pronged strategy. On the one hand, Hello competes with Didi Chuxing (in which Alibaba is also involved as a minority stakeholder) in offering on-demand rides, a category that’s become more onerous to the operator as Chinese regulators introduce stricter safety policies. On the other hand, Alibaba applies what it’s best at — the asset-light platform play — to ride hailing with its own mapping service AutoNavi acting as a marketplace for third-party apps including Didi and AutoNavi.
It could be a few more years before it’s clear which of Alibaba’s strategies will stick it out. Didi still takes the lead with 66 million unique devices on its app in December, according to data collected by research firm iResearch. Hello was a tenth of its size at 6.3 million.