Alibaba-backed taxi-hailing app Kuaidi Dache announced on its official account on Sina Weibo Monday that it is reducing the amount of its instant cash rebates and rewards to customers and drivers using its service, starting from Tuesday.

Kuaidi will reduce its rebates to customers who use its app and pay via Alibaba's mobile payment service Alipay Wallet from 13 yuan ($2.12) to 10 yuan, while rewards to drivers who use Alipay Wallet will drop to 5 yuan.

Analysts say this means Kuaidi Dache is pulling back from a cut-throat competition with Tencent-backed Didi Dache to win users by offering rebates.

Didi Dache announced it will maintain its subsidy policy in which customers will get 12-20 yuan back for using its app and Tencent's online payment services, Beijing Youth Daily reported on Tuesday.