Image credit: Tencent Video
According to Chinese media, Nanjing is home to a “car graveyard” of close to 1,000 vehicles. The brand-new cars are being stored in an industrial park as companies wait for the lifting of a local ban on certification for new rental and ride-hailing vehicles. Although not all the cars belong to ride-hailing platforms, photos and videos show that some sport the logos of Didi and Meituan.
Nanjing’s government first announced a temporary ban on new rental car licenses on April 19, but news of the restriction leaked two days beforehand, AI Finance & Economics reports. That led to a rush to buy and register vehicles, as Nanjing mandates that all additional ride-hailing cars must be new.
However, in August of this year, Nanjing leveled an additional restriction on the industry, stalling the processing of rental car certification for three months. Until that regulation ends on November 16, close to 1,000 new cars have been left idle in the Nanjing industrial parking lot.
Image credit: Tencent Video
Nanjing has been the site of fierce ride-hailing competition, boasting an unusually high ratio of some 20,000 cars for a population of around 8.3 million residents. Meituan launched a pilot “ride-share” program there this past February, heightening the competition among the seven platforms that once occupied the city.
The secretary of Nanjing’s local taxi association, Ling Qiang, told AI Finance & Economics that ride-hailing platforms’ tactic of offering discounts drove down demand for taxis significantly.
Meituan has since slowed its ride-hailing ambitions, and Nanjing government regulations have temporarily ceased the entry of new cars into the rental ecosystem. But the fight may not be over just yet. This past May, Didi’s number one competitor Dida Chuxing entered a strategic partnership with Nanjing’s taxi association. All of the city’s taxis can now be booked via Dida’s platform, with modest RMB 1-2 discounts available for online users. Dida doesn’t operate any non-taxi ride-hailing services there, however.
Although not a true “graveyard,” the Nanjing lot of unused cars brings to mind images of the sites around China where thousands of rental bikes have gone to die. The boom of the bike rental market has led to oversupply in many cities, as well as vandalism. Ride-hailing has yet to go the same way, although Nanjing’s limits on the number of rental cars may be a harbinger of things to come.