Didi asks authorities to go easy on private car service

Jing Gao

Chinese ride-hailing service provider Didi Kuaidi has appealed to the Chinese authorities for a little wiggle room to develop its private-car service.

The call came in the wake of a stringent set of state regulations imposed earlier this month that could potentially throttle China’s booming private car booking businesses, represented by the likes of Didi Kuaidi and U.S. rival Uber.

In the outspoken and widely publicized letter on Monday, Didi called for recognition of its achievements and consideration for its contracted drivers and vehicles. 75% of the drivers on its platforms, it says, handle fewer than four ride requests daily, which qualifies them to be at best “part-time drivers”. It also argued the availability of private car services greatly complements the current transportation offerings and addresses a severe shortage of taxi cabs during rush hour. Job opportunities are additionally provided for millions of people looking for an alternative source of income.

As per the new regulations, requiring a Didi driver to obtain a taxi-driver’s license and register their car as a commercial vehicle, may force a majority of drivers out of the game and inconvenience urban residents by removing vehicles from the road, Didi argues.

Didi proposes a new management mechanism whereby the government would only regulate the car-booking platform, with platforms given the latitude to supervise drivers and vehicles. Didi claims, having the government oversee and assess every step of the car-booking process will “adversely affect the vitality of the business and competitiveness in the market”.

“We sincerely ask that the relevant department delegate the powers… so we can together hammer out market access criteria and standards and optimize resource allocation,” Didi writes in the letter.

Didi further calls for giving leeway to local authorities to devise separate policies based on various regional circumstances. It cites Shanghai as a perfect example of being pragmatic and flexible in adopting tentative measures that exempt private cars from complex registration procedures.

Didi is financed by two of China’s largest Internet giants, Tencent and Alibaba, and occupies about 82.3% of the private-car sharing market, according to research firm Analysys International.

Its app Didi Chuxing is said to serve 200 million people in over 300 Chinese cities, with its multi-tiered transportation offerings including traditional cab-hailing, private-car hailing, personal drivers and a private bus service which was activated on Monday. The company also co-launched its Didi Doctor service with e-commerce giant Alibaba which it hopes will aid in medical service delivery by utilizing cloud computing technology.

Despite Didi’s protestations, the carefully and candidly worded appeal has won popular support online and it remains to be seen whether Didi’s appeals will achieve their intended effect. Chinese authorities seldom give in to public pressure, and calling them out generally backfires on businesses and individuals.

In early 2015, Alibaba cried foul over criticism from the State Administration of Industry and Commerce about the plethora of counterfeits and substandard products sold on its e-commerce sites. In a bold rebuttal, it said the biased and unscientific survey selected only 51 products out of the more than 1 billion that it had on sale. In the end, Alibaba Chairman Jack Ma ended up calling a truce and shaking hands with the watchdog’s representative and promised a crackdown on questionable merchandise.

(Photo from Baidu Image)

Jing Gao

Jing founded her own blog Ministry of Tofu and worked with Los Angeles Times, Greenpeace and LinkAsia. She graduated with a master's degree in Journalism from the University of Illinois.

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