(Yicai Global) Nov. 18 -- Shares in Dazhong Transportation surged by as much as 8.8 percent today after the Chinese urban transport operator said that e-commerce giant Alibaba Group Holding will buy a 10 percent stake in its carsharing platform Letzgo for CNY40 million (USD6.3 million).

Dazhong’s share price [SHA:600611] was trading up 2.12 percent at CNY3.37 (USD0.53) at 2 p.m. China time. Earlier in the day it had reached CNY3.59.

Once completed, Alibaba will become the fourth largest stakeholder, Shanghai-based Dazhong said yesterday. Dazhong will remain the biggest shareholder but its stake will fall to 46.8 percent from 52 percent.

Letzgo was the first company to get a ridehailing license in Shanghai in 2015. It operates an online taxi, car hailing and auto rental business and has more than 10,000 registered drivers. In the first three quarters the company posted losses of CNY12.5 million (USD2 million) on revenue of CNY12.5 million. It has assets of CNY21.5 million and liabilities of CNY16.2 million.

Hangzhou-based Alibaba has invested in a number of ridehailing platforms. It participated in a USD280 million funding round by Hello Chuxing earlier this month. Its digital mapping unit AutoNavi also runs the ridehailing service Gaode Jiaoche.

Editor: Kim Taylor