China’s ride-hailing market might be in for another stir. Former chairman of Baidu’s food delivery platform Baidu Waimai, Gong Zhenbing, is moving on to become the CEO of ride-hailing platform Yidao Yongche, The Paper is reporting (in Chinese).
Yidao went through a rough period in April and May last year after a cash squeeze that led to protests from its drivers over payments. Three of Yidao’s co-founders left the troubled company at the time. The company’s founder and former CEO Zhou Hang blamed its controlling shareholder LeEco diverting to other purposes an RMB 1.3 billion fund originally earmarked for the firm.
The arrival of Gong Zhenbing is a part of a wider restructuring of Yidao both in terms of leadership and ownership. This is the first time a CEO has been selected since last September when former CEO Peng Gang left. In June of last year, Taoyun Capital reached an agreement with LeEco on acquiring a majority stake in Yidao Yongche. Taoyun Capital has also backed bike-rental platform Mobike and JD.com financial services arm.
The restructuring could make Yidao a viable competitor to Didi which now rules the ride-hailing market and Meituan Dianping which is currently trying to snatch a piece of it.
Before joining Yidao, Gong served as the company’s advisor. According to him, Yidao will focus on the ride-hailing service itself. The company is able to offer cheaper prices for luxury vehicles. Yidao also has a different cost structure from Didi and other services because it doesn’t invest in maps, unmanned vehicles, and other services. This will enable them to give more funds to the drivers, he said.
“I’m very optimistic about the prospect of Yidao’s new model, that’s the main reason why I chose to join Yidao,” said Gong.
Gong was part of Baidu’s team since 2014. Baidu’s takeaway service was sold to its rival Ele.me in August 2017. Gong left the company in March this year.