BEIJING • It has been dubbed the "war of the century", a showdown between Chinese ride-hailing giant Didi Chuxing and an ambitious new player.
Takeaway delivery firm Meituan Dianping, which provides services ranging from restaurant reviews to travel bookings, added ride-hailing to its menu for China's most populated city of Shanghai on March 21.
It is dangling subsidies and rewards to get drivers and users on board the Meituan Dache platform.
One Shanghai resident identified as Ms Wang said: "From the consumers' point of view, we will pick whichever is cheaper."
In the first three months, Meituan will waive an 8 per cent commission for drivers, reported the Shanghai Daily on March 22. Didi drivers pay a 20 to 25 per cent commission.
If a driver makes 600 yuan (S$127) in fares every day, the company will award an extra 200 yuan.
Passengers get 14 yuan in digital coupons for the first three rides and an additional 50 yuan if they invite friends to use the new service.
Meituan, which is backed by Sequoia Capital and Tencent Holdings, began its ride-hailing service in Nanjing last year and is starting in several more cities this year, including Beijing, Chengdu, Hangzhou, Wenzhou, Fuzhou and Xiamen.
Passengers and drivers have complained of lower subsidies and higher fares since Didi's US$35 billion (S$46 billion) acquisition of Uber's China operations in August 2016 ended their fierce price war and sealed Didi's near monopoly. It is now the world's largest ride-hailing firm by the number of rides.
Fares quickly rose by up to 30 per cent, prompting state news agency Xinhua to slam Didi for "unjustified and unscrupulous" rate hikes.
A survey by Web portal Sina out last August found that getting a ride in China became harder and more expensive after Uber left.
Drivers also complain that Didi has cut their subsidies.
"In 2016, (Uber) and Didi were fighting like dogs. If you earned 100 yuan, they gave you 100 yuan in subsidies," one Beijing driver told Reuters in January.
"Now I still work eight hours a day, six days a week, but if I'm lucky I earn 6,000 yuan."
Financial news website Caijing last week reported that most drivers now earn around 6,000 yuan to 7,000 yuan a month, against more than 10,000 yuan in 2015.
There are around 1.5 million taxi drivers registered with Didi.
As China's ride-hailing market matures, firms are coming under increased attention from regulators.
Since it defeated Uber in 2016, Didi has also come under scrutiny by the government over alleged monopolistic practices.
Just hours into its new service, Meituan was ordered to remove an advert on its official WeChat account that highlighted low rates, prompting fears of a price war.
The authorities told Meituan to "set reasonable pricing" for its services, and that it must not employ "lower-than-cost" pricing policies to gain a competitive advantage, reported South China Morning Post.
Meituan, which is valued at US$30 billion, claims the new ride-hailing service captured one-third of total market share in Shanghai within days of the launch.
Didi remains unfazed by the challenge. Chief executive Cheng Wei told Caijing in January: "Didi has withstood the fiercest competition in history, from Kuaidi to Uber."
"We have PK'ed countless rivals," he added, using a local slang for beating an opponent in computer games.
Didi is recruiting food delivery riders in several Chinese cities to enter Meituan's turf - meal delivery.