Ride-hailing startup OnTime to launch in Guangzhou before expansion into Greater Bay Area

OnTime, a ride-hailing platform backed by Tencent Holdings and Guangzhou Automobile Group, will become the latest player to enter China’s mobility market – the world’s biggest – when it rolls out services later this month.

An aerial view of Guangzhou, China / Photo credit: Pexels

The Guangzhou-based startup will begin services in the city before expanding into the Greater Bay Area – a southern China business hub that covers Hong Kong, Macau, and nine Guangdong cities – marking the arrival of yet another new challenger to market leader Didi Chuxing.

To kickstart the service, OnTime announced on its Weibo account that users would be able to hail a ride for a mere 0.01 yuan amid soft operations in Guangzhou this Thursday and Friday, before the full launch.

The foray comes as China’s ride-hailing market heats up after Didi beat Uber out of the country in exchange for a minority stake in 2016. Both Didi and OnTime count Tencent as a major backer, while other investors in the Guangzhou-based start-up include Guangzhou Automobile Group and Guangzhou Public Transport.

An increasing number of carmakers have also been piling into the market. Last month, electric vehicle start-up Xpeng Motors launched a mobility service in Guangzhou, and in November, BMW announced it had secured a ride-hailing permit for Chengdu, making it the first global carmaker to gain such access in China. A car-hailing platform backed by state carmaker Shanghai Automotive Industry Corporation also began trial operations in Shanghai last year.

Didi – backed by tech giants Apple, Tencent, and Alibaba Group Holding, among others – has long been vaunted as the market leader after triumphing over arch-rival Kuaidi, gaining its Uber-slayer title and ending a cutthroat subsidy war.

The Beijing-based company has a market penetration of 88% in China’s ride-hailing market, according to industry estimates.

The competition is getting tougher, though. Earlier this month, Meituan Dianping launched its aggregated ride-hailing service in 10 Chinese cities including Beijing, enabling users to compare offers from several platforms such as Geely’s Caocao Car and Shouqi, and then hail a ride via the Meituan app.

Didi has also opened its platform to smaller rival companies for the first time in a pilot program in Chengdu, where users can choose to hail a ride dispatched by Miaozou, a mobility unit under travel platform Tongcheng.

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