Didi Uber driver-side rewards have shrunk across the board, and costs will be passed on to consumers
"Whether it’s Didi or Uber, subsidies are a sales pitch to attract consumers to’look over ‘and then become users." Some analysts say the platform has been waiting for the time to end the long "money-burning war". The merger of Didi and Uber is an "opportunity", so subsidies will sooner or later be reduced or even cancelled.
After the merger of Didi and Uber China, various questions have also arisen. Questions about the alleged monopoly of the two continue to emerge. The monopoly issue involves pricing power. At present, the combined market share of the two is greater than 90%. Passengers have questioned whether the price of online car-hailing after the merger will increase and the discount will be reduced. Online car-hailing drivers also doubt whether the rewards for drivers are getting less and less stringent. Uber employees began to consider the question of "where to go". After all, after the merger of Internet Tech Giants, the second team is often marginalized.
Beijing Youth Daily reporter’s investigation shows that the current pricing of Didi and Uber for passengers has not changed, but the corresponding discounts and incentives for drivers have indeed decreased. Although no one has left the Uber team yet, competitors have offered attractive conditions for poaching people.
passenger
Why is the fare higher than before?
Yesterday, the user "Astro Boy Head" posted a screenshot of "The same journey, Didi’s price increase is all recorded" on Weibo. The screenshot of the payment shows that an order "Astro Boy Head" paid only 2 yuan on July 27 and before, 5 yuan on July 30 and August 2, and 7.6 yuan from the 3rd. At the same time, there are many passengers on Weibo discussing the issue of Didi’s price increase.
The Beiqing Daily reporter found that, in fact, in the days of the merger of Didi and Uber, the unit price of Didi and Uber has not increased. At present, the charging standard of People’s Uber is 1.5 yuan/km + 0.25 yuan/minute; the charging standard of Didi Express is 1.8 yuan/km + 0.5 yuan/minute.
So why do passengers feel that the prices of Didi and Uber have increased? The reasons may be threefold: First, the subsidies of Didi and Uber for the passenger side have been reduced. A Beijing passenger reported that currently Didi only has the subsidy of "discount coupons", which are only for fixed models, and the discount is about 15% off, which can be said to have little impact on the price of taxis; while Uber has often launched activities such as "2 orders per day, 10 yuan off each order", or getting on/off the bus in a certain area to enjoy a 50% discount. He recalled that not long ago, the area of Beijing almost took turns to engage in this activity, which was very strong, but now it is gone.
In addition, although not after the merger news was announced, Didi and Uber did adjust their prices recently. The Beijing Youth Daily reporter learned that Didi has raised prices sharply in many cities, and Uber has also adjusted its price standards in some cities. Last month, Didi Express quietly increased its price in Beijing, from 1.5 yuan/kilometer + 0.35 yuan/minute in September last year to 1.8 yuan/kilometer + 0.5 yuan/minute. According to reports from Guangzhou media, Didi’s price standard in Guangzhou rose from 1.4 yuan/kilometer + 0.45 yuan/minute to 1.8 yuan/kilometer + 0.5 yuan/minute in June. The latest billing standard is 2 yuan/kilometer + 0.55 yuan/minute, an increase of more than 30%. Although Uber’s recent charging standards in Beijing have not increased, according to a passenger in Wuhan, Uber’s charging standards in Wuhan have recently increased from 1.5 yuan/kilometer + 0.2 yuan/minute to 1.8 yuan/kilometer + 0.3 yuan/minute; according to local media reports in Guangzhou, Uber’s current price in Guangzhou is about 1.1 yuan/kilometer + 0.55 yuan/minute, while in March, Guangzhou Uber’s price was about 0.99 yuan/kilometer.
In addition, both Didi and Uber have corresponding "premium systems". After Didi and Uber reduce the rewards for private cars, passengers will encounter higher premiums when taking a taxi. That is to say, Didi and Uber’s billing standards are only under "normal conditions". Once they encounter conditions such as difficulty in taking a taxi, long waiting time, and bad routes, Didi and Uber will increase a certain multiple on the basis of the above-mentioned price standards. At this time, the price cannot be calculated according to the standard pricing method, but must be multiplied by a coefficient, which can be as high as or even more than 4. For example, when it rained heavily in Beijing last month, Uber increased the price by 4.2 times, and Didi increased the price by more than 3 times. In this way, the price of Didi and Uber is much higher than the current taxi in Beijing. A senior Didi passenger told the Beijing Youth Daily that Didi’s dynamic premiums are now "very frequent". "Anyway, when I need to take a taxi, there is basically no non-premium, 1.5 times, 2 times is very common." He said that although Didi will estimate the price before starting the journey, the words "premium multiple" are very small and may be ignored by some passengers. It should be noted that the current active drivers of Didi and Uber have decreased compared with the peak, and it is not uncommon to see premiums on the passenger side.
driver
Didi and Uber’s rewards are gone?
A few days ago, some Didi Express drivers in Xi’an joined forces to speak out, saying, "Didi has won 49.12 yuan for 15 orders, 16 orders, 17 orders, and 18 orders, to 40 yuan for 20 orders, and 60 yuan for 30 orders… We use our own cars, our own oil, and our own insurance to work for Didi. In the end, Didi rewards us with an insurmountable threshold." According to Xi’an media reports, since August 4, Didi has reduced the rewards for all private car franchise drivers by 80%. It is expected that all rewards for private car franchise drivers will be cancelled in the near future.
In fact, Didi and Uber have been tightening incentives for drivers. Last winter, Didi’s subsidy policy was: a reward of 100 yuan for running 10 orders a day, a reward of 200 yuan for 20 orders, and certain requirements for the number of transactions on the previous day. After this year, the reward suddenly shrunk to 40 yuan for 10 orders a day and 90 yuan for 20 orders. At present, Didi’s end is a reward of 60 yuan for 20 orders a day, with an average reward of 3 yuan per order.
Uber’s rewards have been on the table with Didi. The reporter of Beiqing Daily learned that the current reward of Uber in Beijing has also dropped from 60 yuan for running 12 orders and 120 yuan for 22 orders at the beginning of this year to 40 yuan for 12 orders and 100 yuan for 22 orders. A former Uber owner told the reporter of Beiqing Daily: "I am too tired to do it. It takes at least 12 hours to run 22 orders. And Uber’s conditions are very harsh, and the average person needs more than 14 hours." The "harsh conditions" he mentioned means that in addition to the number of orders, Didi and Uber also have requirements on transaction rate (referring to the percentage of the final completed order to the number of orders) and service star rating. According to him, Uber’s terms rose from 50 per cent of the week’s transaction rate to 65 per cent, and its service rating rose from 4.7 to 4.8 stars, "it really takes a bit of luck".
In addition, the "newcomer award" for joining the platform is also gradually decreasing. According to the current newcomer reward policy of the Beijing Didi platform, the reward for completing 6 orders within 3 days of the activation of the new driver’s account is 58 yuan; the previous policy is to complete 2 orders within a week from the account activation. The reward is 50 yuan, and the reward for completing 5 orders is 100 yuan.
The phasing out of incentives has led to the loss of some drivers. Earlier this year, there were multiple reports that Didi and Uber’s subsidies for drivers had dropped sharply, some part-time drivers were withdrawing from the platform, and some full-time drivers left the platform after weighing the pros and cons. This situation caused the aforementioned passenger premium to increase.
follow up
Didi drivers will be deducted from more than 20% of their income
At present, the income of Didi and Uber drivers is mainly composed of the commission income of orders, the reward for completing orders, and the doubling premium during peak hours.
Drivers of Didi Express can only take about 74% of the order fee (including the premium), and about 26% of the fee is charged by the platform, insurance and labor service companies. The approximate proportion is that the platform charges 20% of the fee including the share of each order. In addition, the driver’s insurance is 0.5 yuan per order, and the affiliated labor service company also charges 1.17% of the reward and order fee.
The 20% of the "fare + peak reward" of the people’s Uber driver will be automatically deducted by the platform. A driver showed a reporter from Beiqing Daily a detailed list of his income for a certain week, which showed that he had collected a total of 137 yuan for sports cars for about 5 hours that week and 46 yuan for peak rewards. On this basis, the Uber platform deducted 20% of the fee, which is 36 yuan, plus a bonus fee of 32 yuan, and he finally got 180 yuan in income.
The order completion reward is a reward given by the platform when Didi and Uber drivers complete a certain order volume every day or within a specified time. For example, Didi’s policy on Friday is: 40 yuan for 12 orders and 100 yuan for 22 orders; Uber’s weekend policy is: 60 yuan for 22 orders and 190 yuan for 45 orders on Saturday and Sunday.
The policy of doubling the premium during peak hours is different every day. According to one Uber driver, Uber’s current doubling premium during peak hours is about 1.5 to 2 times, 1.1 to 1.3 times at peak times, and sometimes even no premium. According to his recollection, according to Uber’s peak premium policy last year, there was 1.8 times at peak times, and about 5 times at peak times. The recent peak doubling reward of Didi is even lower. According to data from Didi, at the peak on Friday morning and evening, the maximum income reward was only 1.2 times, and one Didi driver said that such a multiple was only a multiple of the previous peak.
It is worth mentioning that when Didi launched Didi Express in May last year, it promised that the service is a non-profit ride-sharing service, and all passengers’ payments go to the owner, and the software platform does not charge any fees. However, it did not take long for the platform to start charging a 20% commission.
analysis
When a monopoly becomes a reality, the cost will be passed on to consumers
Analysts said the apparent removal of discounts was not surprising, with the merger marking the end of competition between the two giants that dominate China’s nascent ride-hailing industry. For more than a year, Uber and Didi offered drivers steep subsidies, sometimes several times the fare, in an effort to lure users with low prices.
Behind the huge subsidies of Didi and Uber for more than a year is the repeated "burning of money" by investors. According to public information, Didi and Kuaidi conducted two rounds of E and F financing after the merger, raising a total of 8.642 billion yuan, and launched a new round of financing only half a year later. At present, Didi is conducting a G round of financing, and in addition to Apple’s $1 billion investment, it has also received more than $6 billion from other top gifters. The same is true for Uber, which also conducted two rounds of financing after registering a company independently in China, with a financing amount of more than 2.10 billion US dollars. Interestingly, the two mobility giants have at least four co-investors, including Tiger Fund, Hillhouse Capital, China Life and BlackRock.
A large amount of financing is used to subsidize drivers and passengers. Uber CEO Kalanick has said that Uber loses more than $1 billion a year in China. At the same time, he also estimated Didi’s subsidies. He said that Didi’s losses are too heavy, and it needs to subsidize 70 million to 80 million US dollars a week, which is about 4 billion US dollars a year. Later, Didi announced that this figure is false and too high, but according to industry analysts, Didi’s annual subsidy fee is at least twice that of Uber, which is about 2 billion US dollars. Since the merged company of Didi and Uber China occupies the vast majority of the market share in the online car-hailing market, whether it constitutes a monopoly or not, such a large market share affects the pricing power of Didi and Uber.
In the eyes of industry insiders, price increases are an inevitable trend. "Whether it is Didi or Uber, subsidies are a means of promotion, the purpose is to attract consumers to’look over ‘and then become users." Some analysts said that the platform has been waiting for the time to end the long "money burning war". The merger of Didi and Uber is an "opportunity", so the subsidy will be reduced or even cancelled sooner or later. Another transportation system expert said: "Why do Didi and Uber subsidize and burn money? He 10 billion and will get 20 billion yuan back from consumers. Once the monopoly comes true, the cost will definitely be passed on to consumers the fastest."
dynamic
China uses "feelings + options" to recruit Uber employees
After Didi and Uber were merged, Shenzhou Special Car released a set of posters with the theme "Love U". The boss Lu Zhengyao personally went to WeChat Moments to "show love" to Uber, openly recruited Uber employees, and offered tempting conditions of "as long as you come, you will give 6 months salary plus options".
In fact, when Didi and Uber announced the merger, Uber, as the "weaker" party, attracted a lot of attention to the whereabouts of its employees. Since last year, the trend of Internet Tech Giants merging has emerged, and various cases have also shown that after the merger of the boss and the second in the industry, the leader and team of the second will be marginalized, or even eventually eliminated.
At present, the Uber team has 800 employees. After the merger of the two companies, Uber China also used the method of deferring the exchange of options to retain employees. An Uber employee told the Beijing Youth Daily that as a multinational company, Uber’s culture is almost completely different from that of Didi, and he is worried about whether it will quickly integrate into the Didi company after the merger. Similar to this employee, there has been a pessimistic mood within the Uber team in the past few days. An Uber employee said he was "very heartbroken", and some said "I don’t know if it is helpless or sad". "Didi is awesome, but I don’t care, I’m a die-hard Uber loyalist," read an article called "Born Proud: Those Young People at Uber," which was widely shared among Uber’s team.
But an Uber employee told the Beijing Youth Daily that no one has left the Uber team yet, "everyone is still busy with their own work, doing the normal work at hand." He said that it is still in a transition period, "this stage generally will not leave, after all, I don’t know what the future will be like. If it is determined that it is not suitable, people may want to leave." Wen Jing, reporter of this newspaper