Within the past few months it has become impossible to hail a taxi at rush hour in Beijing. Instead of stopping for outstretched arms, drivers are chasing richer prizes: smartphone users who have downloaded an app that pays both parties for a ride.
The apps give a rebate to the passenger and a tip to the driver. They help cabbies, who have long complained that prices are held artificially low by state fiat. Many will not pick up passengers at peak times unless cars are ordered online. With the apps, users can offer an extra tip in advance, creating a market price for taxis where none existed before.
The two competing apps are fielded by rival Chinese internet conglomerates, and for now consumers and drivers are reaping the rewards. Didi Dache [“Honk Honk Taxi”] and Kuadi Dache [“Fast taxi”] have spent millions of their investors’ money.