Internet-enabled e-cars are ready for Chinese users in minutes and cost far less than conventional rental services
When car sharing started in Canada and then spread to the United States in the mid-1990s, people had no idea the business model would be flourishing 20 years later on the other side of the globe in China.
Now the share cars, mostly electric, are ready for Chinese users in minutes once they complete the required registration via an app. And in most cases, sharing costs less than traditional car rental services, which charge on a daily basis.
Gofun Chuxing, an app which provides car-sharing services in Beijing, launched by State-owned Beijing Shouqi Group, is one of the players in the swelling car-share market. With more than 1,100 cars available in Beijing, the company also offers services in Shanghai, Xiamen and Qingdao.
Wei Dong, chief executive officer of Gofun, believes that as share cars increase there will eventually be fewer cars on the road.
Wei said: “We see hundreds of cars parked around office buildings for hours until the owners drive them home after work. It is a total waste of resources.”
Gofun was founded in 2015 and the eponymous app was launched in 2016. With a 699-yuan ($101) deposit, every drive via Gofun costs 1 yuan per kilometer and 0.1 yuan per minute.
It is expected that Gofun will be available in 20 cities and provide more than 15,000 cars nationwide by the end of 2017.
Once known as the “Kingdom of Bicycles” in the 1980s, China has now taken the top spot in the car market globally, seeing more cars on the road than ever before.
According to the Traffic Management Bureau, part of the Public Security Ministry, Chinese own a total of 135 million private cars, making about 260 million trips a day by June 2016.
To ease traffic jams, local governments have placed a limit of the number of vehicles on the road, especially in big cities such as Beijing.
Sensing the potential to cater to people who don’t own cars, dozens of Chinese enterprises have marched into the market in recent years, including Car2go, a car-sharing service provider backed by automotive giant Daimler AG.
Zhang Xu, an analyst at Beijing-based consultancy Analysys, said the share cars can offer an alternative tailored traveling choice; and the potential for the future market is great.
Zhang said: “Currently those enterprises can’t really provide enough cars to meet the demand, which shows the desire for this kind of service. I believe the market will grow in the second half of 2017 and investment will pour into the market.”
As more people choose to use car-sharing services, they have also encountered problems, such as lack of parking spaces.
In January, Beijing Shouqi announced a strategic partnership with the Beijing Municipal Road & Bridge Group Co Ltd. The deal allows Beijing Shouqi to have access to the latter’s more than 50 parking lots in Beijing’s second and third ring roads.
Tan Yi, chief operating officer of Gofun, said: “At the moment there are some problems in the market. But we also see that the public now have a better understanding of those emerging businesses. And the government is firmly promoting the use of new energy and the development of the sharing economy.”
According to Tan, service providers are expected to turn a profit after two or three years when the overall environment improves.
He said: “At that time, producing new energy cars and the operation will cost less than today. And the government may help us access more parking resources.”
Ma Si contributed to this story
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As China’s emerging car-sharing market gets set for rapid development, State-owned Beijing Automotive Group Co Ltd, one of China’s largest automakers, has announced it would launch car-sharing services in the second quarter of this year.
Xu Heyi, deputy of the 12th National People’s Congress and chairman of BAIC Group, said during the ongoing two sessions that the company planned to launch car-sharing pilot projects in key areas of Beijing such as Wangjing.
“The new vehicles will be two-seater electric cars. And we will launch a new app for users to access the services and locate the cars.”
BAIC Group is in talks with the authorities concerned on building sites where users could rent cars. It will build such sites under overpasses or at traffic hubs.
Xu said several rough edges need to be smoothened still. For example, management of car rental sites and logistics of collecting cars from select parking lots need to be worked out.
Beijing’s administrative sub-center Tongzhou district will not be included among the areas to be shortlisted for trials, BAIC Group said. BAIC Group is yet to announce the scale and extent of its planned car-share operations.
Car sharing is expected to add a new option to surface transport choices of city folk.
Currently, ride-hailing firms such as Didi Chuxing offer cabs via apps, which complement the conventional taxi services. In addition, there are premium private vehicles available for hire.
Now, owners of private cars, especially electric vehicles, will double up as on-demand ride providers, potentially increasing the number of vehicles that users can summon or share by several millions.