Earlier this year Meituan Dianping, the Yelp of China, declared war against its food-delivery rival Eleme and ride-hailing giant Didi Chuxing with the slogan  “灭饿除滴” (Take Down Ele.me, Wipe Out Didi)Now, Meituan has made the move to enter the ride-hailing business.

The Beijing-based e-commerce platform has launched its new ride-hailing service Meituan Dache (美团打车) in a second city, Shanghai, on Thursday March 21st. After an 11-months long testing phase in Nanjing, Meituan started expanding its testing operations to other cities last December, including Beijing, Shanghai, Chengdu, Hangzhou, Fuzhou, Wenzhou, and Xiamen, 

Meituan Dache’s driver agreement

However, its Beijing operation was soon suspended due after the comapny was called in by the Beijing Communications Commission for not meeting the necessary criteria. Following the incident, Meituan has obtained the “Online Taxi Booking Business Operations License” for its Shanghai operation.

According to a document filed by Meituan, the Dache operation in Shanghai is owned by Lutuan Information Technology Co. who added online ride-hailing services to its list of operations since last July.

Before launching the Dache service in Shanghai, Meituan added a new sign-up page online with the slogan “You decide when to open.” On the day before launch, Meituan announced that over 200,000 passengers had registered online for the Dache service. There was an “unspoken rule” behind this: Meituan will launch the Dache service in cities that has over 200,000 registered users. On top of that, the first 200,000 passengers will get a taxi coupon, and the first 50,000 drivers to register will not have to pay a commission to Meituan.

TechNode signed up early and received the five coupons (and RMB 5 taxi coupons).

After taking a few rides, TechNode felt that there are a certain freshness and excitement to Meituan’s new Dache service. In addition, Technode found out that the Dache app only takes up 70MB of storage, which is half of Didi app (185MB). However, to be fair, Meituan’s app and its services are relatively less complicated than Didi’s.

Payment screen on Meituan Dache

The in-app user experience is quite simple as well. Meituan doesn’t force users to bind payment methods immediately after they sign-up.  When a user gets off the vehicle, the app also prompts users to select a payment option. The app supports a variety of payment options, such as, WeChat’s password-free payment verification.

Concurrently hailing a private car and a cab

Meituan also puts extra effort into the user interface — it allows users to request a taxi and privately owned car at the same time. This feature is expected to benefit users who are in a rush.

Let’s also take a look from the drivers’ perspective.  TechNode’s first ride was operated by a female driver who had already made six orders that day.  She told TechNode that Meituan is “driver-friendly.”

“Meituan seems to be fair with drivers. Unlike working with Didi, which the system would sometimes ask me to drive three kilometers away to pick up a customer when there were a lot of people around me are holding their mobile phones and calling for taxi services during rush hours. After that, I just let my husband take over my account.  Today, customers who called my service are in a close location to me, so I don’t have to make a detour specifically for them,” said the female driver.

The driver explained that the above scenario is what they called “Sweep Orders”, a jargon in the ride-hailing business that refers to low-performance orders. Insiders told TechNode that Didi has a complicated system that ranks its drivers, which high-performance orders are given to drivers that they favor.

“Meituan offers some good rewards and benefits. The driver can get RMB 10 subsidy for the first order, RMB 8 for the second, and RMB 6 for the third,” Mr. Ji, another driver who had taken three orders yesterday, said. “Meituan currently isn’t taking commissions from drivers, but that’s because they are seeing fewer orders a day. Not that many people know about Meituan’s ride-hailing service yet.”

Yesterday Chinese media reported that to attract drivers Meituan has introduced a new policy called the “上海开城无忧保障奖” (Shanghai’s opening care-free award). Starting from March 21, drivers who complete at least 10 orders a day, remain online for at least 21 hours (between 6 am and 12 pm), cancel no more than 10 orders, and with no record of click farming or cheating for six days on end, Meituan will offer the benefits including reward with an additional RMB 200 for those who have earned over RMB 600 a day.

Some drivers have actually jumped ship from Didi to Meituan. “My husband was a Didi driver. He got the message of Meituan’s new ride-hailing service,” said Ms. Wang, a car owner who also have signed up with Meituan.

Meituan made a good debut in ride-hailing in Shanghai, according to the responses from users. However, the real challenge is whether the company can still keep its drivers and users in the app after it removed the rewards and benefits policies in the future.

-Translated by Carol Peng and Nicole Jao