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April 24, 2019

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Need a license? Put tech in the driving seat

Sandy Gao, a young woman in Shanghai, was feeling a lot of frustration after failing her test for a driver’s license twice within several months last year. She finally triumphed, however, with the help of smart devices and Internet services.

Gao is not alone in turning to technology to get her through what can be a grueling process. Every year, an estimated 25 to 30 million people in China apply for driver’s licenses. Many are hampered by a lack of training, limited instructor resources and more difficult exams initiated in 2017.

Today, many successful wannabe drivers pay for technology to help them pass the requisite exams.

“The learning process is now digitalized and easy,” said Huang Feng, cofounder of a company called Chelun, which is exhibiting at the ongoing Shanghai International Automobile Industry Exhibition. “This is a market with huge potential in China.”

Chelun, meaning “better wheels life” in English, is a Shanghai-based startup with an expected market value of over 2 billion yuan (US$298.5 million).

The driving test service, which has helped over 100 million people get their driver’s licenses, is one of Chelun’s fastest-growing businesses.

The company is a market leader with its almost 700,000 professional instructors in driving schools accounting for 80 percent of the nationwide total.

During the local auto show, Chelun is showcasing products that include a smart box recording drivers’ routes and operations, an application offering training videos and simulation of written tests, and a teaching application with data management and analysis.

Students are willing to pay for applications that improve learning efficiency and avoid repeated visits to driving schools, which are often in far-flung suburbs.

“After failing my tests, it was a nightmare for me to keep going to a driving school that was a two-hour trip away,” Gao explained.

She said 38 yuan (US$5.7) to Chelun for simulated written tests. She also paid for a “smart box” as a hardware plugged into the teaching car, which helps teachers and drivers record driving exercise behavior and offers customized analysis and suggestions, including facets sometimes neglected by teachers.

The cost of using the box is 30-50 yuan, based on various locations and exercise programs. Students and teachers can log in via WeChat, and driving instructors share income with Chelun.

The paid user base of Chelun’s driving test services hit 1 million yuan in 2018, double from a year earlier. It’s expected to surpass 2 million yuan this year, said Huang.

Each year, about 30 million people take driving tests, but the number is dropping every year because of China’s demographics and perhaps the slump in car sales.

Analysts estimate the number of people seeking driver’s licenses may drop to about 25 million annually.

Chelun is not worried about that, said Huang.

Driving test users can be parlayed into the company’s other businesses, including assessments of new cars, creating media on green vehicles, fostering a community of car owners and related e-commerce services, Huang said.

Chelun, which has finished a round of financing, is looking at the possibility of an initial public offering, including choice of the new Technology Innovation Board in Shanghai.


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