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Didi Kuaidi: Uber's Enemy in China

forbes.com

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Re: Didi Kuaidi: Uber's Enemy in China

#21

Post by fspeech »

adventured wrote: post #19
Asbostos wrote: post #17

Earlier quoted context omitted.

How is that a problem? They don't have IP protection on the idea. It's quite fair and lawful for another company to copy it. They still need to overcome network effects and actually implement it. As the article shows, this was hard.

The parent comment didn't say they did have IP protection, nor that it was unlawful. They asked how a company can or should respond in order to compete effectively. It's a huge problem for most any company anywhere: how to compete when your competition is able to effectively clone you (not to mention if they have other advantages you inherently can't match in the market in question).

Also, it is just Forbes' words that Didi "emulate Uber’s model whole cloth". Fortune has a different perspective "But Didi has some built-in competitive advantages, by virtue of the fact that it was in the market earlier and that it designed its business for the Chinese market, instead of trying to import a template perfected elsewhere." http://fortune.com/2015/09/30/will-china-be-ubers-waterloo/

The Fortune article gave more details about Didi's model.

Re: Didi Kuaidi: Uber's Enemy in China

#23

Post by tew28 »

chvid wrote: post #7

The article talks about subsidies. Does anyone know how much Uber and friends are subsidising their rides? As in if I pay on average 10 USD to Uber, then the driver gets what? 5 USD, 10 USD, 15 USD?

Uber drivers get paid an amount based on a subsidy multiplier of the ride value, and they are highly sensitive to these multipliers. According to a driver I talked with recently, Uber takes 20% of the fare, but is currently giving drivers a bonus of about 2.5x. So if a fare is 10 rmb, Uber takes 2 rmb, then pays out 8 * 2.5 = 20rmb. Driving costs these drivers roughly 1-2 rmb/km, and if the subsidy ever fell below 1.3x, the drivers would lose money (these are for People's Uber level of cars, which is the lowest level). Unless the subsidy can ever drop below 1.25x, Uber will be paying for every ride. And if it does, drivers will be parking their cars or switching to another service.

Uber also lost a lot of money through a couple of vulnerabilities that have since been, I believe, patched. Some people were able to figure a way to create fake rides through the app, allowing drivers to get paid without ever driving anyone. They previously also allowed riders to link up Alipay accounts to their Uber accounts, but Uber had no way to ensure the Alipay accounts had funds. So people would take Uber with an empty account, and Uber would have to pay drivers without receiving any money from the riders.

Another side note: there was recently a publicity campaign with some well-known celebrities that had very explicit nationalistic messages encouraging Chinese citizens to use their local service and not the services of an outsider.

Uber will be burning a lot of money in China.

Re: Didi Kuaidi: Uber's Enemy in China

#24

Post by fspeech »

sea2summit wrote: post #22

Ultimately Uber is doomed. Being first to market is great for building a brand, but the barrier to entry is so low for this manner of service that eventually they'll succumb to death by a thousand competitors.

First to market in the US. This Fortune article http://fortune.com/2015/09/30/will-china-be-ubers-waterloo/ says Didi was in the market earlier in China.

Re: Didi Kuaidi: Uber's Enemy in China

#25

Post by jn4 »

chvid wrote: post #7

The article talks about subsidies. Does anyone know how much Uber and friends are subsidising their rides? As in if I pay on average 10 USD to Uber, then the driver gets what? 5 USD, 10 USD, 15 USD?

In Bangalore, the driver seems to be making $3 for every $1 spent by the passenger.

For Uber, this translates to about $7.5m/month of subsidy in Bangalore alone.

Source: http://capitalmind.in/2015/10/the-economics-of-using-uber-in...

Re: Didi Kuaidi: Uber's Enemy in China

#26

Post by wodenokoto »

When I lived in shanghai 5 years ago I was told that a cab driver would make about 4,000yuan a month. So needless to say I was quite impressed by the numbers in the article. I know full time office workers that makes considerably less than that with a masters degree!

Re: Didi Kuaidi: Uber's Enemy in China

#27

Post by rahimnathwani »

wodenokoto wrote: post #26

When I lived in shanghai 5 years ago I was told that a cab driver would make about 4,000yuan a month. So needless to say I was quite impressed by the numbers in the article. I know full time office workers that makes considerably less than that with a masters degree!

That cab driver is probably still making around the same amount of money, and she's probably working 12x7 rather than 8x5.

Re: Didi Kuaidi: Uber's Enemy in China

#28

Post by rahimnathwani »

chvid wrote: post #7

The article talks about subsidies. Does anyone know how much Uber and friends are subsidising their rides? As in if I pay on average 10 USD to Uber, then the driver gets what? 5 USD, 10 USD, 15 USD?

I asked a Beijing-based Uber driver why there is so much more availability now than there was a month ago. He said that there are currently some special incentives, one of which is a 1000RMB 金牌 (gold medal) for any driver who exceeds a certain # rides in a week, with an average rating of 4.8 or more.

Re: Didi Kuaidi: Uber's Enemy in China

#29

Post by te_chris »

seanmcdirmid wrote: post #3
beefsack wrote: post #2

It's worth pointing out that Uber has already become massive in China; whenever I'm in Guangzhou there are a ridiculous amount of rides available and you're rarely waiting more than a few minutes.

I think that is only because black cabs already existed and were so popular in those areas. Uber legitimizes them, whereas before you would have had to worry about getting ripped off. Suffice it to say, most of those drivers are probably on didi zhuanche and get more business from them than Uber. Its not that Uber is massive, but drivers have no concept of exclusivity so just monitor all the networks they can (even t…

This is what happened when Uber launched in Auckland as well. In NZ taxis are already pretty lightly regulated - no medallion system etc - so most of the uber drivers were taxi drivers who were using Uber, Zoomy (local hailing app) or normal taxi fares.

Re: Didi Kuaidi: Uber's Enemy in China

#30

Post by seanmcdirmid »

JumpCrisscross wrote: post #18
seanmcdirmid wrote: post #6

Earlier quoted context omitted.

Note when I say black cab, I actually mean 黑车 whose direct English translation probably isn't very precise. Essentially, these are illegal taxis that would have wandered the streets looking for fares when they can get away with it. They don't mean a legal black livery car as in say...NYC. You didn't see them so much in the first tier cities (though they are still around) where there were enough taxis, but they were e…

> Note when I say black cab, I actually mean 黑车 whose direct English translation probably isn't very precise. Essentially, these are illegal taxis that would have wandered the streets looking for fares when they can get away with it. They don't mean a legal black livery car as in say...NYC. Gypsy cabs?

No, just random migrants and rural residents with cars coming to the city to make a buck.
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