The financial turmoil affecting ride-hailing service Yidao Yongche (易到用车) is still ongoing, although Yidao chairman He Yi noted that the company has achieved breakthroughs in financing and promised that Yidao will be able to let drivers withdraw payment through the app by the end of May.
Yet the cheerful message from the company chairman still failed to assure anxious drivers. There have been large crowds of drivers seen lining up at Yidao’s Beijing and Shanghai office eager to cash in their payment every workday since Yidao founder Zhou Hang made public a spat with company shareholder LeEco one month ago. There were reportedly more than 300 drivers rushing to Yidao’s Beijing headquarters on April 18 alone.
There have also been rumors that Yidao would consider asking its users to top up membership fees of the company controlling shareholder LeEco’s video streaming unit with the remaining funds in these users’ Yidao accounts if the company failed in its financing endeavors.
Yidao has also said that their telephone hotline is no longer available. They said that users can contact customer service online and wait for a call-back.
While the company has been teetering following the recent cash squeeze and the departures of the company’s three co-founders, there have been concerns that the implementation of the upcoming new industry regulation will deal the firm another blow.
According to regulations on ride-hailing services released last December by the Beijing and Shanghai governments, drivers for ride-hailing services must have local household residency, and vehicles they use must be registered with local car plates, . Beijing has given affected companies a five-month grace period set to expire soon.
While competitors including Didi Chuxing (滴滴出行) and Shenzhou Zhuanche (神州专车) have obtained their online ride-hailing licenses in succession, Yidao has yet to get its own to date.
In addition to difficulty in paying drivers, Yidao has also defaulted on payments to third-party suppliers including car-rental companies and app promotion partners.
Although Yidao claims that it has applied for a license with Beijing transportation authorities in March and expected it to be approved soon, it is unknown whether the besieged ride-hailing service can obtain the license, given its current cash strain.
In contrast, ride-hailing service giant Didi Chuxing recently has finalized a funding round of over US$ 5.5 billion, pulling further ahead of cash-strapped Yidao.