Ride-hailing industry reaching saturation point

The golden age is gone for ride-hailing drivers, as the market in some cities is approaching the saturation point and policies are tightening.

According to the Ministry of Transport, as of April 30 there were 309 online ride-hailing companies in China. Local governments have issued 5.4 million certificates to drivers and 2.3 transport licenses for vehicles, a respective month-on-month increase of 3.4 percent and 2.2 percent. In April, there were 706 million online orders, a month-on-month reduction of 1.4 percent.

Meanwhile, transport bureaus in a number of cities across the country — including Dongguan, Sanya, Wenzhou, Jinan and Suining — have issued warnings saying that drivers are getting fewer than 10 orders a day on average.

The transportation bureau in Changsha, Hunan province, said it will stop releasing new certificates for online car-hailing drivers.

An editorial opinion in Economic Daily said the government should strengthen market monitoring and release risk warnings for practitioners and investors. Based on local conditions, it should establish a ride-hailing exit mechanism as soon as possible to avoid excessive market competition, the opinion said.

A driver in Beijing surnamed Guo works with Caocao, a ride-hailing platform. He said he has noticed that there are fewer passengers than in the past.

"Apart from the service fees charged by the company, today I have taken 17 orders and my revenue reached 366 yuan ($51). I want to take another four orders and increase my revenue to 500 yuan with bonuses. But I have to spend half of that on fuel," he said.

When he arrives in an area to pick up a passenger, the car-hailing system may show 36 drivers nearby but only nine people calling for service.

Guo said his monthly income from driving is between 6,000 and 7,500 yuan. He often works from 10 am to 10 pm, but because he lives in the southern Sixth Ring Road area, his last order of the night can significantly diminish his profits. If he cannot pick up a passenger to the southern part of the city, he must return home without compensation.