Trending in China: Car Sharing

China is the perfect recipient for a huge development of car sharing services.

As the sharing economy is getting more and more traction all over the globe, so is in China. We already saw the fast improvement in the bike sharing services in China in the last few months. I strongly believe that in the first half of 2017 we’ll see a similar situation with car sharing services.

The car situation in China

As in many developing economies, being a car owner it is a status-symbol. But China is not a developing country, since within China there are very different situations.

First tier cities like Beijing and Shanghai are already overcrowded with cars, causing constant traffic jams from dawn to sunset and almost no chances to find a parking spot.

Moreover, studies show that most of the air pollution of Beijing is caused by cars exhaustion gasses.

The old solutions

The local governments, in order to solve the problem of traffic congestion and parking availability tried to find solutions.

The first is to impose a car rotation based on plate numbers. From Monday to Friday only eight different tail numbers can be on the road and two are not allowed. During the weekends there are more traffic jams than in working day, since there are no restrictions of sort.

The second part of the solution is to limit the amount of new cars that can be sold each day. For this reason in first tier cities, who’d like to buy a car has to first win a license plate. I used the term “win” because the way the government assigns the plates it is not on the basis of “first arrived first served” but as a random lottery. In Beijing you can expect to wait the average of 3 years before winning a plate. In the constant effort to reduce air pollution, EVs (Electric Vehicles) are immediately equipped with plate at the time of purchase.

The new solution: Car Sharing

The new generations, especially the urban youngster grew up in first tier cities, are less interested in owning a car. With about 30% of the population being born between 1980 and 1990, this is a very big slice of the population cake.

The reasons reside in all the problems mentioned in the above paragraphs, plus the increasing cost of buying and maintaining a car.

At the same time, youngsters are more likely to use sharing economy services, like bike sharing. Moreover, they are already using car hailing apps like Didi Dache (who recently merged with Uber in China), and they are heavy users of online payments.

The future solution will be the car sharing.

As we can read on DesignHotPot:

Car-sharing is still an emerging industry in China. In 2012 there were only two car-sharing operators, with a total of 39 vehicles in Chinese cities. In 2016 this has grown to a total of one thousand vehicles within 5 active operators in Beijing, Hangzhou, Wuhan, Shenzhen and Changsha.

Car Sharing companies to be kept in mind

Based on the considerations of different prominent figures of the Chinese Startup Ecosystem, there are three Car Sharing companies to be kept in mind: TOGO, EZZY, and Yidu.

For more info about a comparison on the different services provided by the above companies, I suggest to read this article by ACT.