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Oct. 23 (NBD) -- Shanghai's traffic authorities on Monday demanded 16 car-hailing platforms including Dazhong Chuxing and Shenzhou Zhuanche to clear unqualified vehicles and drivers out of their platforms by December 31 of 2018, as regulations over car-sharing and ride-hailing services are being increasingly strengthened all over the country.

Taxis cruising the streets of cities again drew attentions from online car-hailing platforms, since a large number of unqualified vehicles were removed. Taxis boast a larger transport capability than that of any existing ride-hailing platform and there leaves much room for Internet firms to imagine the possibilities, Dida Chuxing's CEO Song Zhongjie noted.

According to statistics from China's Ministry of Transport (MOT) in 2017, the number of the country's cruising taxis stood at approximately 1.4 million units and taxis completed around 100 million trips on average every day despite its declining modal share. 

However, the market of cruising taxis, for a long time, has been regarded to be segmented by regions, which causes difficulties in creating the scale effect required by Internet products.

Song said to news portal 21st Century Business Herald that online booking service launched by some leading taxi companies didn't work well, adding that online booking service of cruising taxis should be integrated into a national platform.

For instance, Shanghai Qiangsheng Holding Co., Ltd., the largest taxi company in Shanghai, have 13,000 cruising taxis dealing with over 8,000 on-call orders every day. But the company's online booking service failed to duplicate the success. 

Song estimated that currently only 5 percent of total orders for cruising taxi nationwide are taken via online channels.

Eyeing the huge transport capacity of cruising taxi, an increasing number of ride-hailing platforms started to cooperate with taxi companies and saw a huge increase in MAU (monthly active users).

Dida Chuxing launched taxi service in late 2017. Data from consultancy firm Analysys shows that MAU of Dida Chuxing surged to 9.11 million in May of 2018 from 3.45 million last November.

Hopes are also pinned on the integration of cruising taxis and app-based car-hailing services for reforms in the taxi industry. Xu Yahua, an MOT official in charge of transport services, once encouraged taxi enterprises to employ emerging technology for supervision over the entire operation process and to explore new earnings distribution schemes between taxi firms and drivers.

Some cities have changed from government pricing to government-guided pricing for cruising taxis, and a few cities have begun to explore dynamic pricing mechanisms for congested periods of the day.

A source who works in the car-hailing sector told 21st Century Business Herald that for the moment, taxis couldn't achieve real-time and dynamic price adjustment, but acknowledged that data collected from platforms with access to more and more cruising taxis would provide a reference for authorities concerning price mechanisms under specific time and climatic conditions.

Email: gaohan@nbd.com.cn