Between Caocao and Didi, who will climb to the top of the ride-sharing space?
As of 2021, the Chinese ride-sharing market comprises 453 million users. This number is expected to grow to 974 million by 2027. Two of the most prominent players in this market are ride-sharing applications Caocao and Didi, each having successfully raised US$700 million and US$22.7 billion in funding, respectively.
At Jumpstart, we decided to compare the two services to see how these fare against each other based on factors like services offered, profitability, passenger safety and price.
Services offered
Present in the ride-sharing market since 2012, Didi has emerged as a clear leader in the Chinese ride-sharing market. In 2021, it made up 90% of the entire market. It offers users a wide range of services, including taxis for hire, hailing a private driver, peer-to-peer car-sharing and bike-sharing. Besides being one of the biggest players in China’s ride-sharing market, Didi also offers services in other countries, like Australia, Brazil, Chile, China, Colombia, Japan and Mexico, and serves 493 million users worldwide.
Caocao was launched in 2015. Due to its late entry into the market, it has tried to set itself apart in the Chinese ride-sharing market by developing purpose-built vehicles. It uses new energy vehicles, like the battery-powered Geometry A Sedan and Maple 80V MPV, which can utilize battery swapping services—they can replace drained batteries with fully charged ones and help reduce e-waste generated from rechargeable batteries. It also provides intra-city pick-up and delivery services. Caocao offers services in 62 Chinese cities with 5.67 million active users.
Profitability
As of 2022, Didi’s annual revenue was US$27.277 billion, a 26.09% increase from 2020. The company had a great year and a record-breaking initial public offering (IPO), raising US$4.4 billion on the New York Stock Exchange. But, this growth and profitability took a downturn once the Chinese government announced a probe into the company due to security concerns. The government banned Didi from app stores, causing ride orders on the app to fall by 29% since its IPO in June 2021.
The company’s stock prices dropped from the US$14 IPO price to US$2.50 in April 2022. As of January 2023, the company has been allowed to relaunch its app, which should help it recover financially.
Meanwhile, amidst Didi’s struggles with the government probe, Caocao raised US$589 million in September 2021 to fund its expansion plans. The company also offered hefty discounts for new users to attract more attention to its services. As a result of its concerted efforts, and perhaps due to a slump in Didi’s growth, Caocao saw a jump in ride orders by 34% between June 2021 and March 2022.
Passenger safety
In 2018, Didi faced massive backlash when the company’s driver allegedly raped and killed a woman. What made the issue even more severe was that the company failed to respond to the victim’s pleas for help and did not act on a complaint against the same driver a day earlier. Since then, the company has invested in creating an autonomous driving unit and launched robotaxis (self-driving taxi service) in Shanghai in 2020 to expand to a million robotaxis by 2030, which could help ensure passenger safety by taking potentially life-threatening human drivers out of the picture.
Caocao states that anyone who wants to register as a driver on their service needs to have three years of driving experience. Drivers also undergo assessments, health checks and criminal record checks to ensure the drive is safe for customers. Caocao also began testing robotaxis in Hangzhou in the Zhejiang province of China back in 2020. As of 2022, the company has joined hands with American software company Pony.ai to provide robotaxi services.
Price
The final ground of comparison is price. The starting price for Didi’s ride-sharing service is 12CN¥ (US$1.78) for under three kilometers (km). The 3 km-20 km range prices are 1.5CN¥ (US$0.22) per km traveled. For those traveling over 20 km, the prices are 1.2CN¥ (US$0.18) per km. As far as Caocao is concerned, it charges 12CN¥ (US$1.78) for less than three kilometers (km) and 2.6CN¥ (US$0.39) per km.
Despite the abovementioned controversies, Didi remains one of China’s most significant players in the ride-sharing market. Despite its initial removal from the app stores, it is estimated that Didi still holds 70% of China’s ride-hailing market. As far as Caocao is concerned, the company has been eager to increase its user base by offering discounts. Both services have their fair share of offerings, making them unique, so there is no correct answer to which one is better. Didi has a comprehensive service range of offerings and thus would be well-suited to meet various needs. If a customer wants to be climate conscious, then Caocao would be the way to go. The company offers new energy cars and low-carbon travel, which make it relatively environmentally friendly.
Also read:
- China Targets Didi in Latest Crackdown on Tech Giants
- Most Prominent Tech Startups in China
- Asian Startups Set to Join the IPO Race in 2022
Header image courtesy of Unsplash
