Uber Driver Takes 'Wait-and-See' Approach as His Fares Drop a Third After Didi's Takeover
Yicai Global
/SOURCE : Yicai
Uber Driver Takes 'Wait-and-See' Approach as His Fares Drop a Third After Didi's Takeover

(Yicai Global) Aug. 8 -- Rather than benefiting from the recently announced merger between Didi Chuxing and Uber Technologies Inc.'s China unit, a driver for the US rise-hailing service in the southern city of Guangzhou, said he is a "victim" of the deal and is taking a wait-and-see approach.

Regarding Didi's promise to increase drivers' income, the Uber driver from Guangzhou tries to find comfort in the knowledge that the two companies both need a "settling-in" period. He will wait and see. If the situation does not change after a while, he will quit taxi-driving and find a new job somewhere else.

Originally from outside the city, he bought a Toyota Corolla and started working as an Uber driver. He starts taking bookings from customers at 8.00 a.m. every day, and typically receives more than 30 fares over 10 working hours.

Things have changed considerably since Aug. 1, when Didi's operator Beijing Xiaoju Technology Co. and Uber announced a planned merger. His bookings have been slashed by one third. On average, he now gets just over 20 fares in a 10-hour period.

"For example, on Aug. 4, I worked more than 15 hours from 8.00 a.m. to past 11.00 p.m., but only got 20 or so fares. In the past when I worked with the Uber system, I used to get a new booking even before the customer reached their destination. This week, however, I always have to wait for 10, or even 20 minutes, before receiving the next order," he told Yicai.

The merger sees an end to the power struggle between the two biggest players in China's ride-hailing industry, one in which each company was losing over USD1 billion a year. Since Didi Chuxing took a minority stake in Uber, the US company has, in effect become the junior partner of its Chinese rival. The Uber driver from Guangzhou feels that he may have been dropped in the pecking order when it comes to the allocation of rides.

The situation worsened ever since he was notified by the company on August 1 to switch from the Uber system to Didi's order allocation system. He believes that, after they acquired Uber China, Didi assigned pre-selected fares to Didi drivers, while remaining fares are allocated to Uber drivers. He feels that Didi may treat its own drivers and Uber drivers differently.

With the rapid development of mobile payment services, a growing number of people started to use online e-hailing taxi services. Uber was seen as the competitor that posed the biggest threat to Didi in the Chinese ride-hailing market, and has been locked in a price war with Didi for the past few years.

Didi had the largest share of fares in the ride hailing market in the first quarter, with 85.3 percent, while Uber and Yidao Yongche Co., ranked second and third with 7.8 percent and 3.3 percent of market share, respectively. Didi and Uber China will have a combined 93.1 percent market share after the recent merger, according to the "Chinese E-hailing Taxi Market Research Report Q1 2016".

Many consumers also believe that the merger of Didi and Uber is not necessarily a good thing and think that only with competition can you progress. Many users in different cities complained that Didi and Uber hiked their prices over the past several days. Consumers are not the only victims.

The Uber driver from Guangzhou told our reporter, that after acquiring Uber, "Didi now has a stronger bargaining power, and the ride-hailing market has become its monopoly. It is no longer worried about losing cab drivers." His income became lower rather than higher this week.

Uber drivers apart, some Didi drivers also feel that they have been "hurt" financially by the deal. Many ride-hailing drivers in Xi'an complained that, as of August 4, Didi cut bonuses by 80 percent for all private car owners, and such incentives are expected to be abolished altogether next week.

In a bid to reassure its customers and employees, Didi issued a statement on August 1, affirming that Uber China will retain its independent brand and operations, and both drivers and passengers will continue to receive consistent services.

"Over 15 million drivers and 300 million users have joined Didi's open, sharing-based ecosystem that connects people, cars and lifestyles. With the addition of the strong talents and experience of the Uber China team, Didi Chuxing will be even better-positioned to serve the Chinese people. Didi Chuxing will also continue to expand its international strategy. We look forward to working with partners at home and abroad, to create more value for drivers, passengers and communities.", Ms. Jean Liu, the President of Didi Chuxing said.

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