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Shanghai taxi operator to start ride-hailing services

By Wang Ying in Shanghai | China Daily | Updated: 2017-12-28 07:59
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Shanghai taxi operator Qiang Sheng has inked strategic cooperation agreements with three partners including the new energy vehicle arm under the State Grid to enter the increasingly popular online ride-hailing sector as part of its efforts to enhance the overall service quality of the city's taxi industry.

The strategic agreement, announced on Tuesday, was inked by Shanghai Qiang Sheng Holding Co Ltd, the State Grid (Shanghai) Electric Vehicle Service Company, Hangzhou YouXing Technology Co under the Geely Group and Japanese taxi company Tokyo MK Corp.

According to the agreement, Qiang Sheng will set aside 1,600 business licenses for e-hailing services while Geely and State Grid will offer 1,600 electric cars for services. State Grid will provide charging stations and Tokyo MK training services for ride-hailing operators.

The electric cars earmarked for online services will be put into the market after the Chinese Lunar New Year that falls on Feb 16 in 2018, the local Xinmin Evening News reported.

"We will strive to form a multi-party cooperative development platform to help Qiang Sheng in its strategic transformation in the taxi sector," said Chen Fang, general manager of Shanghai Qiang Sheng Holding Co Ltd.

According to Chen, all the parties will explore a new platform and mechanism to further utilize resources and integrate respective businesses, in an effort to increase their innovation and branding.

The cooperation looks to promote energy saving and facilitate transportation efficiency in Shanghai. Currently, Qiang Sheng operates more than 12,000 taxicabs across Shanghai, accounting for a quarter of the city's total.

"All of our partners are bellwethers in their own sectors. The State Grid has built a nationwide smart car networking platform; Geely's Cao Cao ride-hailing service developed by YouXing Technology is the first Chinese domestic new energy-focused mobility service; and Tokyo MK is well-known for its quality services in the Japanese taxi industry," said Cheng Lin, deputy general manager of Shanghai Qiang Sheng Holding Co Ltd.

Internet technologies and sharing economy boom have made online car-hailing a hotspot among young consumers, attracting many business startups and heavy investments. For example, China's leading car-hailing firm Didi Chuxing announced that it had raised over $4 billion in its new equity funding round on Dec 21.

However, the new sector is facing a puzzle on how to strike a balance between regulation and development, as the car-hailing becomes increasingly hard in major cities. According to a report by Securities Times, car-hailing difficulties in Beijing surged 12.4 percent as of June from a year ago, by 17.7 percent in Shanghai, 13.2 percent in Guangzhou and 22.5 percent in Shenzhen during the period.

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