Recently, regulatory authorities in many places issued early warnings for online car hailing, which again triggered discussions about the saturation of online car hailing market.
It is not new for various regions to issue early warnings against the saturation of online car hailing market. Red Star Capital Bureau noted that as early as last year, Sanya, Jinan, Zhuhai and other cities had issued similar warnings, reminding that the number of online car hailing orders is declining and the transport capacity has become saturated.
Behind the saturation is the imbalance between supply and demand. The growth of online car hailing users has kept pace with the growth of non online car hailing drivers. By the end of October 2020, 2.545 million online car hailing driver licenses will be issued in all regions; By the end of October 2023, this number has risen to 6.334 million copies.
Bai Wenxi, vice president of China Enterprise Capital Alliance, said to Red Star Capital Bureau that the issuance of online car hailing saturation early warning in many places means that the online car hailing market will face intensified competition, improved access standards, and limited access, while the imagination of online car hailing enterprises for sustainable growth will also appear ceiling.
Online car hailing market saturation
Many places Remind caution of "entering"
On May 20, Jiangxi Jingdezhen Transportation Bureau issued a risk warning notice for online car hailing industry, saying that the urban online car hailing transport capacity is becoming saturated, prompting caution in entering the online car hailing market.
The notice mentioned that influenced by factors such as the rapid increase of online car hailing and the number of employees, at present, the daily average number of orders for online car hailing in Jingdezhen urban area is about 15, the daily average operating income of a single car is about 240 yuan, the market capacity of online car hailing is becoming saturated, and some online car hailing platforms are idle due to the lack of orders.
The picture is from the official website of Jingdezhen Transportation Bureau Red Star Capital Bureau noted that before Jingdezhen City, many places in the country have issued similar risk warnings for online car hailing industry, and all mentioned that the online car hailing market is becoming saturated.
On May 16, the transportation bureaus of Putian City and Shangqiu City issued the risk warning notice of online car hailing industry on the same day. Putian said that, affected by various factors, the city's online car hailing capacity has become saturated, and the average daily volume of single cars and average daily revenue have declined to varying degrees. Shangqiu City said that the urban network taxi hailing capacity is close to saturation based on the urban population, mass travel demand, public transport development level and the utilization rate of existing taxi mileage and other factors.
The two cities also released relevant data on the online car hailing market. By the end of April, there were 14 platform companies in Putian that had obtained the Business License for Online Taxi Booking, of which 10 had daily average orders less than 1000. There are 24177 drivers who have obtained the Driver License for Online Taxi Booking. It is estimated that the average hourly income of full-time online taxi hailing drivers is 30-40 yuan. After deducting costs, the average monthly income is about 4000-8000 yuan.
Shangqiu also mentioned that, influenced by factors such as the rapid increase of online car hailing and the number of employees, as of the end of April, the daily average number of orders received for single online car hailing in the urban area is 15 to 18, and the daily average operating income of single car is 200 to 230 yuan.
On April 16, Chongqing Municipal Commission of Transport issued the first quarter online car hailing investment and operation risk warning, saying that the vehicle capacity has far exceeded the actual demand, and released a set of supply and demand analysis data: "In the first quarter, Chongqing's online car hailing monthly average attendance and receipt of orders (monthly receipt records) was about 65000, accounting for 54.7% of the total number of online car hailing in the central city. With the existing order size, it is actually difficult to support all 118000 online car hailing vehicles in the central city to participate in the operation service. "
On April 11, Shenzhen Transport Bureau released the operation dynamics and risk warning of online car hailing industry, saying that the Shenzhen online car hailing market has become saturated. In recent years, practitioners have successively withdrawn from the Shenzhen online car hailing industry after assessment.
Red Star Capital Bureau noted that it is not new for all regions to issue early warning against the saturation of online car hailing market. As early as last year, Sanya, Jinan, Zhuhai, Suining and other cities have successively issued the notice of risk early warning for the online taxi booking industry, reminding that the number of online taxi booking orders is declining and the transport capacity has become saturated.
2 million drivers serving 300 million users in 2020
6 million drivers will serve 500 million users in 2023
Behind the saturation of the online car hailing market is the imbalance between supply and demand. The growth of online car hailing users has kept pace with the growth of the number of drivers without online car hailing.
According to the data of the Ministry of Transport, 2.545 million online car hailing driver licenses were issued by the end of October 2020. By the end of October 2023, this number has risen to 6.334 million copies. By the end of March 2024, a total of 6.791 million online car hailing driver licenses had been issued. In other words, in just over three years, the number of online car hailing driver licenses has increased by about 166.8%.
In addition to drivers, the number of online car hailing platform companies is also growing. At the end of October 2020, 207 online car hailing platforms nationwide have obtained business licenses. By the end of March 2024, this number has risen to 345, an increase of 66.7% compared with October 2020.
This can also be confirmed from the public financial reports of the listed companies in the head of online car hailing. According to Didi's previous IPO prospectus, from March 2020 to March 2021, the number of domestic active drivers in Didi will be 13 million annually (including online car hailing, valet driving, hitchhiking, etc.). From March 2022 to March 2023, the number of active drivers in China will reach 19 million annually.
However, the growth of online car hailing users has not kept pace with the growth of the number of online car hailing drivers. According to the Statistical Report on the Development of Internet in China released by China Internet Network Information Center, as of December 2020, the number of online car hailing users in China is 365 million. As of December 2023, the number of online car hailing users in China is 528 million, an increase of 44.6% in three years. In other words, in 2020, more than 2 million drivers will serve more than 300 million users; By 2023, more than 6 million drivers will have served more than 500 million users.
Some market voices worry that the online car hailing market tends to be saturated, with more drivers and fewer orders, and the driver's income declines, which will eventually lead to the decline of service quality and the increase of driver passenger conflicts. On May 22, Bai Wenxi, vice president of China Enterprise Capital Alliance, said to Red Star Capital Bureau that the issuance of online car hailing saturation warning in many places means that the online car hailing market will face intensified competition, improved access standards, and limited access, while the image space for sustainable growth of online car hailing enterprises will also appear ceiling.
Bai Wenxi mentioned that travel enterprises should not only improve and perfect services, strengthen their competitiveness to improve market share, provide extended services and value-added services to promote their own performance growth, but also work with other travel enterprises to improve the industry environment construction, promote industry development and market prosperity, so as to achieve common growth in market expansion.
Red News Reporter Qiang Yaxian
Edit Yu Dongmei
