The Chinese National Network Information Center (CNNIC) has released its 44th report on the development status of the Internet in China. The report notes that total netizen count was listed as 854 million by the end of July, adding a total of 25.98 million people to the number of netizens in the first half of 2019. Internet penetration rates were recorded at 61.2%, a 1.6% increase over the same period in the previous year. Netizens in farming communities were listed at 225 million, a figure that represents 26.3% of total netizens and a 3.05 million increase over the end of 2018. Urban netizens were counted at 630 million, a figure that represents 73.7% of total netizens and a 22.93 million increase over the end of 2018.

Online ride-sharing and taxi service users in China totaled at 337 million in June 2019, a 6.7 million increase over the end of 2018 and a figure that represents 39.4% of total netizens. Online ride-sharing and taxi service usersin China totaled at 339 million, a 6.33 million increase over the end of 2018,a figure that represents 39.7% of total netizens.

Figure 1 & 2:Number of online ride-sharing and taxi service usersand usage rates

Policy compliance has also seen significant strides in development. There are now a total of three licenses required to enter the ride-sharing market, and as of February 2019, there were a total of 247 cities in China that announced development suggestions and advice regarding ride-sharing services, a total of 110 ride-sharing firms that were licensed for operation, a total of 680,000 drivers were licensed and a total of 450,000 licenses for transports were awarded. This has ensured peaceful development and avoidance of overtly aggressive competition in the market.

Companies have also been adjusting development strategies in order to improve their business operations. Many companies such as Meituan and Gaode have been accelerating integration of corporate resources by leveraging their visibility in the market to create business relationships with many different service providers on the market and increase their own userbase in the process.Business models diversification has also been accelerating with companies experimenting in various business models. Companies such as Shouqi and Shenzhou have been migrating from a self-operated business model to a model that combines theself-operated business model with franchising. Didi and Yidao have been usingfranchise platforms to hire professional drivers and have also begun to incorporate the use of NEVs to keep operating costs under control while also improving upon service quality.

Ride-sharing service users are diverse in age, though average age tends to be lower. Ride-sharing service uses are based in 31 different provinces inChina, with usage rates varying based on location.

Figure 3: 2019 H1 online ride-sharing and taxi service usage rates based on region