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Jan. 4 (NBD) -- Yidao Yongche, a Chinese ride-hailing company, announced on Tuesday that it will upgrade its Young models to Yida models and reduce the commission fees for Yida model drivers to 5 percent of the total fare per order in 7 Chinese cities so as to attract new drivers. 

It is noted that though Yidao's 5 percent commission rate is pretty low in the ride-hailing market, the new car-sharing platform Meituan Dache is going even further in this respect. 

Currently, Meituan Dache charges drivers an 8 percent commission. With the implementation of planned expansion in seven other Chinese cities, the new ride-hailing platform is planning to offer a commission-free policy to new drivers who finish pre-registration before its operation in those newly added cities. 

An industry insider told NBD that since Yidao has stepped out of its troubles, the company, with a new strategy in place, still has opportunities to make a comeback in the ride-hailing market.

Last year, the company had mired in troubles caused by the financial crisis of its former controlling shareholder LeEco. In July 2017, Taoyun Capital became Yidao's largest shareholder and substantially adjusted the latter's management framework. Then the ride-hailing company returned to normal operations.

With regard to the cut of commission fees, the head of Yidao's operations pointed out that China's ride-hailing market will be better regulated due to the introduction and implementation of government's related policies, making the decline of order prices and commission fees an inevitable trend.

He also disclosed that the reduction of commission fees would likely be expanded to other cities in China, and commission charges for other models will also be changed soon.

Meituan Dache's expansion as well as Yidao Yongche's recovery signal the emerging fierce competition in the ride-hailing industry. More players are believed to make changes, which will shake up the whole industry.

Li Junhui, an intellectual property expert at China University of Political Science and Law, told NBD that fine and differential business operations will become the trend of the industry.

Li further explained that on the one hand, ride-hailing companies should provide distinct services to customers at different levels, and on the other hand, efforts should be done to extend or integrate other service scenarios to/into the ride-hailing scenario.

Email: zhanglingxiao@nbd.com.cn