Uber has expanded People’s Uber, its ridesharing pilot program, to more cities in China today, following its August launch in Beijing. People’s Uber is now available in Hangzhou, Chengdu, Wuhan, Shanghai, Shenzhen, and Guangzhou.
People’s Uber matches car owners with people looking for a lift. Unlike Uber’s other options, UberBLACK and UberX, riders are only expected to pay enough to cover the driver’s basic costs, like gas or tolls.
In its announcement, Uber said that it launched People’s Uber in China because “Chinese consumers are known to be early adopters of technology, and municipal governments have acted quickly to support forward thinking initiatives that improve the city’s quality of life.”
The company hasn’t disclosed exactly how a non-profit ridesharing program fits into its overall business strategy. One way that Uber can benefit, however, is by getting more Chinese consumers on the Uber app, in the hopes that they will eventually start using its paid options.
In China, Uber faces two formidable competitors: KuaiDi Dache, which is backed by Alipay, the online-payment platform and Alibaba Group subsidiary, as well as Didi Dache, which is backed by Tencent, another Internet giant that is probably best known overseas for its messaging app WeChat. Didi already has plans to hold an IPO in the U.S. within the next three to five years.
Both Kuaidi and DiDi are already popular among drivers and riders alike. In fact, Beijing’s transport commission issued a ruling in February that allows taxis to use only one taxi-calling app on their smartphones because they said that checking messages from several different apps results in hazardous driving.
Shanghai’s city government then created a similar regulation. The Shanghai Municipal Transport and Port Authority cited the apps’ pricing war, stating “though the taxi booking apps raised efficiency, their marketing and the function to add premium prices have disturbed the fair market order. App enterprises unwilling to be regulated will face a shutdown of their apps.”
Of course, regulations in major Chinese markets is a problem that Uber will share with its local competitors, but People’s Uber may help it gain some positive publicity.