Meituan will stop operating its own ride-hailing fleet and shift towards aggregated rideshare services in a strategy update that will cut costs and, it hopes, develop other growth avenues, local publication LatePost reported on Monday.

Why it matters: The decision marks a significant retreat for the Chinese food delivery titan, which has been competing against dominant ride-hailing company Didi for more than six years and could be a turning point for transport in the country’s evolving services sector.

Details: According to an internal letter obtained by LatePost on Monday, Meituan has decided to cull its proprietary ride-hailing operations in several major cities and will look to expand its aggregated services with third-party providers nationwide.

  • The life services platform said in the letter that it would scale back efforts in ride-hailing, with some employees to be consolidated into other business lines.
  • The remaining ride-hailing team will be combined into a larger unit, with team lead Rocky Zhang to report to Li Shubin, head of Meituan’s platform operations.
  • The backdrop of Meituan’s cost-cutting move is slowing revenue growth due to the macro economic environment, the report said, citing a person close to the company.
  • A Meituan spokesperson declined to comment when contacted by TechNode on Tuesday.

Context: Meituan announced its entry into the Chinese ride-hailing market back in early 2017 and operates a proprietary fleet of around 120,000 drivers in cities including Shanghai, Nanjing, and Chengdu as of last December.

  • The company has also been offering aggregated rideshare services that connect its users with other service providers since mid-2019 and prioritized the business in a stand-alone unit two years later, when unit leader Zhang began reporting directly to chief executive Wang Xing.
  • The tech giant briefly ramped up efforts to subsidize users and drivers in exchange for market share in mid-2021. This came immediately after long-time rival Didi was banned from signing up new users by regulators in connection with its US public listing.
  • The platform has a daily order volume of around 1 million rides, of which 40% are fulfilled by Meituan’s own fleet, said the report. Didi remained the dominant ride-hailing player with a market share of more than 60%, providing nearly 17 million rides per day as of February. In comparison, Alibaba’s mobility platform Amap provided 8 million rides.

Jill Shen is Shanghai-based technology reporter. She covers Chinese mobility, autonomous vehicles, and electric cars. Connect with her via e-mail: or Twitter: @yushan_shen