One-third of the private car market is occupied by Shenzhou Private Car. Has it been eliminated?

From the moment you pick up your phone to call a private car, China's private car market has been a very lively stage. One of the main sources of excitement is how the private car platforms "burn money"? And where does the money come from?

There is no doubt that subsidies are an extremely important means of competition in China's private car industry. Fare subsidies have led to a fierce competition between Didi and Uber, and have also brought Yidao, which had gradually faded out of people's sight, back to the center of the stage.

In contrast, Shenzhou Private Car, which seems to be a lonely company, does not seem to have kept up with its competitors recently. In addition, the investment community generally believes that the uncertain prospects of Shenzhou Private Car's business is a major reason for the sharp drop in Shenzhou Rent-A-Car's stock price. At the same time, the recent rumors of Alibaba's strategic investment have not been implemented for a long time, making the future of Shenzhou Private Car full of too many uncertainties.

Using car rental to support private cars, heavy asset operations cannot escape bad luck

Although from the very beginning, Shenzhou Special Car’s own vehicles were regarded as a major advantage in the market, from a certain perspective, this also put Shenzhou Special Car in a dilemma.

Unlike Didi, Uber and Yidao's idea of ​​allocating idle social resources through the Internet, Shenzhou Private Car attaches the asset cost of its self-purchased vehicles to Shenzhou Rent-A-Car, and then compensates the rental company in the form of private car rental fees. In fact, Shenzhou Private Car and Shenzhou Rent-A-Car are completely tied together, and essentially follow the "old path" of taxi companies with "own vehicles and drivers". The "Shenzhou Private Car" under heavy asset operation cannot be called a "private car" under the "sharing economy" Internet model, or should be directly called a "high-end taxi."

According to insiders of Shenzhou Private Car, Shenzhou Private Car currently burns up to 200 million yuan every month, but in addition to subsidizing user fees like other car rental platforms, its expenditure on vehicle purchases is also very huge.

Last year, including long-term and short-term rentals, CAR Inc. rented nearly 30,000 vehicles to "Shenzhou Private Car". Based on the purchase cost of a Passat sedan of 100,000 yuan, CAR Inc. provided nearly 3 billion yuan in operating costs for Shenzhou Private Car last year. Under heavy asset operation, the pressure that Shenzhou Private Car has brought to CAR Inc. behind it is obvious.

Is clinging to Alibaba's 3 billion "thigh" just "unrequited love"?

It takes money to "serve" both users and cars. Obviously, Shenzhou Special Car needs more money than its competitors. At this time, the rumored 3 billion yuan investment by Alibaba sounds timely but also seems strange.

After the news of its investment in UCAR came out, Alibaba has announced that "Alibaba and Didi Chuxing have a close and pleasant cooperation, and will continue to support the development of Didi Chuxing. Alibaba currently has no new plans in the travel field." In short, Alibaba owns Didi, and Alibaba is not currently involved in other private car businesses.

From Alibaba's perspective, becoming a shareholder of two ride-hailing platforms at the same time is by no means a good deal. Moreover, UCAR is implementing traditional economic practices under the general environment of the "sharing economy". Whether in terms of the current number of users or the long-term business model, it has no advantage over Alibaba's existing Didi.

In addition, even if the dream of UCAR comes true and Alibaba invests 3 billion yuan in “life-saving money”, the declining trend that is already a fait accompli will be difficult to change.

In February this year, Lu Zhengyao, chairman of UCAR, made it clear that the company was planning to be listed on the New Third Board within the year. Unfortunately, not long after, on March 14, UCAR shares were sold off sharply by shareholder Hertz, forcing the parent company, UCAR, to increase its shareholding ratio by nearly 30%.

What is even more interesting is that Lenovo Holdings, the former largest shareholder of China Auto Rental, remained indifferent even after being stripped of the title of "largest shareholder" in this equity change. The reason for this, on the one hand, can be speculated that Lenovo Holdings began to have doubts about the heavy asset management model of China Auto Rental and backed down to prepare for capital transfer; on the other hand, this also provides a good explanation for why China Auto Rental made a big fuss about "Ali's investment" instead of using Lenovo, with which it has a close relationship, to create momentum.

If Alibaba really wants to enter the Shenzhou Private Car business at this time, it would be more accurate to say that it is playing the role of a "takeover man" to delay its decline rather than taking a stake and investing. All these bizarre aspects undoubtedly make the authenticity of the entire incident extremely controversial.

The three-way competition is set, and Shenzhou Private Car has run out of opportunities

The world of private cars has never been a one-man battle. In the industry, Didi is backed by two major capitals, Alibaba and Tencent. Uber Global is the backing behind Uber in its fierce fight with Didi. Yidao joined the LeEco ecosystem last year, and its 50% discount showed the power of "capital". In contrast, now only Shenzhou Private Car is fighting alone. Without a "godfather" who pays it, it lacks the initiative to speak in the market.

According to the "China Private Car Market Trend Forecast Report" released by iResearch, Didi's market share reached 84.2% in the fourth quarter of 2015, with Uber, Shenzhou Private Car and Yidao ranking second, third and fourth respectively. However, at a media communication meeting held earlier, Yidao announced that its daily order volume has exceeded 500,000. Unfortunately, Lu Zhengyao, chairman of Shenzhou Private Car, once publicly stated to the media that Shenzhou Private Car's daily order volume is around 300,000, and an insider revealed to the media that in fact Shenzhou's daily order volume peaks at only more than 200,000 orders, and now it has dropped to more than 100,000 orders. The industry's pattern is set to be rewritten.

It is also worth noting that after LeEco took control, Yidao continued to increase its subsidies, with the goal of increasing daily orders to 1 million in 2016, surpassing Uber in terms of turnover and overtaking to take the second place in the private car market. In this way, the gap between the top three in the industry will be further narrowed, which also means that the distance between the fourth place in the industry and the leader will widen again.

Finally, possible policy changes may make matters worse for Shenzhou Private Car. The lifting of the ban on private car operations by Didi, Uber and Yidao is already a major trend in the industry. The unavoidable car rental costs of Shenzhou Private Car make it unable to compete with the "sharing economy" model of private cars in terms of price. With the calculation of user usage costs and market screening, taxi companies disguised as "pseudo-Internet" companies will no longer have a need to exist.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.