Didi Chuxing, China’s leading car hailing app, has been quietly increasing its prices in several cities since last month, in a sign that the country’s cash-burning ride app wars may be decelerating.
The company, which claims to have an 80 per cent market share of the local ride hailing market, has been locked in a cosplaytly price war with US competitor Uber since last year.
Generous subsidies, sometimes amounting to three times the price of the fare, meant that until recently both car hailing services were less expensive than a regular taxi.
However, in a sign that Didi may be conserving its ammunition, prices for its rides throughout June appear to have risen by one-third in a number of cities, and drivers confirmed that subsidies had been cut by an equivalent amount.
Didi has not made a formal announcement on pricing, but it issued a statement that referred to the dropping of subsidies.
"We are rid of subsidies in many cities and price our products to market levels," said Didi, adding that prices vary from city to city.
Uber declined to comment on its pricing. Drivers said that Uber had also raised prices and lowered subsidies, but not by nearly the same magnitude as Didi.
Both Uber and Didi were haemorrhaging cash as a result of the subsidy war. Travis Kalanick, Uber’s chief executive, has admitted to losing more than $1bn last year in China, while Cheng Wen, Didi’s chief executive, said March that the company had set aside $4bn in 2015 for what he called "market fostering".
Analysts said the price increases could mean that Didi’s financial backers are pressuring it to spend less on subsidies. But the company may also believe that it no longer needs to compete on price.