Backed by Zhejiang Geely, Cao Cao will trial its new energy-focused mobility service, offering rides with zero emissions and zero pollution through its electric vehicles.
A French Cao Cao driver recharges the company's car in Paris. Image credit: Cao Cao
Cao Cao Zhuanche (曹操专车) launched its trial service in Paris on January 2 amid rising competition at home. It's the company's first move into overseas markets.
Founded in 2015, Cao Cao ride hailing service was developed by Hangzhou YouXing Technology Company and is the first Chinese domestic new energy mobility service. Since its establishment the company has grown to serve 31 million registered users across China. Cao Cao is currently in over thirty cities, including Ningbo, Hangzhou, Chengdu, Qingdao, Nanjing, Tianjin, Taiyuan, Dalian, Suzhou, Guangzhou, Yingkou and Xian. The fleet includes over 30,000 new energy cars, as stated by Cao Cao in a post on the company's official website. Moreover, last year the company completed an RMB 1 billion (156 million USD) Series A round from various investors, at a valuation of over RMB 10 billion (1.6 billion USD), according to Sina Technology.
Three things seemed to have contributed to Cao Cao's high valuation. Firstly, Cao Cao uses only electric vehicles from Chinese automaker Zhejiang Geely (吉利汽车), which is also a strategic investor in the company. It is stated that by using these cars, the company has saved approximately 300,000 tons of carbon emissions and 150 million liters of fuel since 2017. Secondly, unlike its competitors, Cao Cao owns all the vehicles used in its service – it primarily uses Geely Auto’s new energy vehicles, including the Emgrand EV, which has a 450km range- and trains its drivers carefully and issues certificates. Thirdly, the company also offers car rental services and private car hailing services. Users can also have a tour guide option.
Meanwhile, China's ride-hailing market is still dominated by Didi Chuxing; expanding to the ride-hailing industry seems like a new trend for Chinese companies. Chinese O2O e-commerce company Meituan-Dianping (美团点评) set up its ride-sharing unit and chauffeured car service provider. Yidao Yongche (易到用车) also launched its taxi-hailing service.
Therefore, surrounded by the intensely competitive domestic market, Cao Cao has decided to expand overseas for future growth. The company said in its official WeChat account that it will use The Electric Taxi, a battery-powered vehicle produced by Geely subsidiary London Electric Vehicle Company, to offer services in Paris.
Cao Cao has two advantages with this move: a new growing market and a rising environmental awareness of French costumers. In France, user penetration for ride-hailing services is forecast to be 12.3% this year, growing to 16.2% by 2023, when the market will be worth USD 2.95 billion, according to Statista. In addition, according to The French General Commission on Sustainable Development (CGDD), air pollution is the most prominent issue that concerns French citizens. 61% of respondents to CGDD’s survey use internal combustion engine vehicles to travel around and two thirds of these do not believe they have a viable alternative.
With a business model of owning its own electric vehicles and directly employing its own drivers, Cao Cao seems to have a good chance of taking over the French ride-hailing market.