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BEIJING, July 24 (Xinhua) -- Facing stiff competition from its bigger rivals Didi and Uber, a smaller Chinese on-demand mobility (ODM) service is ready to make a dent in the capital market.
UCAR Inc, which was co-founded by Chinese car rental firm CAR, gets listed Friday on the National Equities Exchange and Quotations (NEEQ) system, an over-the-counter (OTC) board established to address the equity financing needs of smaller Chinese firms that cannot meet the listing requirements for either Shanghai or Shenzhen.
China's ODM market is dominated by homegrown start-up Didi and the American counterpart Uber. According to consultancy firm iResearch, Didi holds 84.1 percent of all daily ride-on-demand requests in China.
UCAR, founded in January last year and valued at around 36.9 billion yuan (around 5.5 billion U.S. dollars), has sought to distinguish itself from bigger rivals as a more premium, reliable service, with in-car amenities such as phone chargers, tissues, umbrellas, Internet and garbage bags.
Shares of UCAR gained 13 percent on Friday, pushing up its market capitalization to 41.8 billion yuan.
Unlike Didi and Uber that ask private car owners to sign up to its platform to gain access to ride requests, UCAR has a 40,000 car fleet and recruits full-time chauffeurs.
UCAR said this model allows it to avoid heavy subsidies that bigger rivals like Didi and Uber have to dole out to drivers, but it has also committed significant capital to subsidize customers in a bid to entice them away from bigger rivals to its own platform to hail ride.
And because its car fleet is formed with vehicles rented from CAR, it also needs to pay a rental fee, at 1.49 billion yuan last year.
At the height of its customer discount program, UCAR gave customers 100 yuan when they topped-up their account with the same amount.
Alibaba bought a 9.7 percent stake in the company for 2.8 billion yuan in March. This funding round also drew investors such as China International Capital Corp., GF Securities and CITIC Securities.
Less than a month after Alibaba acquired stakes in the firm, it transferred all of its stakes to two investment funds at the same price at which it invested earlier.
Little explanation was given by UCAR and Alibaba regarding the motive behind the transfer but domestic media outlets report that the move could be a result of a conflict of interests in Alibaba's backing of UCAR's bigger rival Didi.
