File Photo/Zhang Jian (NBD)

Jan. 21 (NBD) – Mobility platform Hello Chuxing announced last Thursday that its ride-sharing business had attracted over 1 million car owner to register since the service was launched 20 days ago, 57 percent of whom come from first-tier and new first-tier cities.

Hello Chuxing said it would trial ride-sharing service in six cities at the end of January, and car owner recruitment started in late December last year.

The move brought new force to the stagnant car-sharing sector as security issues sparked wide public concerns. Last year two female passengers were murdered by drivers in May and August respectively when they were using carpool service on Didi Chuxing, China's dominant mobility giant. 

Didi announced afterwards that it would suspend ride-sharing service indefinitely. Two other companies, Ctrip and AutoNavi, also quietly shut down similar services.

The pauses gave Hello Chuxing a good opportunity, but difficulties like security and legal compliance remain to be solved.

Hello Chuxing told NBD that security of drivers and passengers come first in its ride-sharing service. In terms of product design, it has no social networking features, which were heavily criticized when people believed Didi's social networking function encouraged drivers to prey on female passengers.

The company also set up strict screening of drivers, 24x7 security hotline, and warning technology.

NBD noted that as the user agreement embedded in Hello Chuxing's app shows, its ride-sharing service is operated by Chengdu Habai Network Technology, instead of Shanghai Junzheng Network Technology, the operator of Hello Chuxing. Public information shows Chengdu Habai is controlled by co-founder of Hello Chuxing.

The agreement states that Chengdu Habai will bear all responsibilities generated by ride-sharing business, a move believed to be Hello Chuxing's attempt to insulate risks from its main body, but experts expressed doubts about the term's legal effects.

Another concern of the agreement is that Hello Chuxing only requires eligible driver to have the right to use the vehicle, not ownership of the car. This may lead people to profit from the service with rented cars, thus damaging the non-commercial nature of ride-sharing. Hello Chuxing responded that it will restrict the orders drivers can take daily according to local regulations.

The reasoning of Hello Chuxing's decision to enter this sector, according to Sun Naiyue, analyst of automobile and travel industry with consulting firm Analysys, is to widen its user base, as well as prepare for likely car-hailing services in the future.

Moreover, for mobile transportation platforms, ride-sharing is an asset-light module and has a viable profitability model. Didi Chuxing, for example, practically bore no expenses in vehicle operations yet took away 28 percent of the bill as commission from its ride-sharing service, which made the service the earliest profitable module though car-hailing services had more orders, according to news outlet Caixin.

Hello Chuxing started out as a bike-sharing platform HelloBike. While top players Ofo nears the edge of insolvency and Mobike was acquired by Meituan Dianping, Alibaba-bakced HelloBike grew steadily and rebranded itself Hello Chuxing to enter the wider mobility sector.

Email: limenglin@nbd.com.cn