Heated competition in the mobile payment sector has spread to calling for taxis as two Chinese Internet giants offer incentives to passengers and taxi drivers to boost usage.

Alipay, the payment service of China's largest e-commerce company Alibaba Group, is providing 10 yuan ($1.6) cash coupons for taxi passengers and 15 yuan ($2.5) for drivers per ride through Kuaidi Taxi to boost its market position.

Since the partnership started in May 2013, Alibaba-backed Kuaidi Taxi's service now covers more than 400,000 cab drivers in 40 cities. In Shanghai, Kuaidi Taxi and Alipay are connected to over 60,000 cabs.

Tencent-backed and Beijing-based Didi Taxi, another popular mobile taxi-calling software, provides incentives of 10 yuan ($1.6) for both drivers and passengers for each successful order paid through Tencent's WeChat payment service. Didi Taxi plans to expand to 100 cities by the end of this year.