
Didi Kuaidi: Uber's Enemy in China - chenster
http://www.forbes.com/sites/liyanchen/2015/09/23/meet-ubers-mortal-enemy-how-didi-kuaidi-defends-chinas-home-turf/
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beefsack
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.

~~~
seanmcdirmid
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
taxi drivers might have used multiple taxing hailing apps before the
consolidation).

Didi kuaidi (and Uber) have done the impossible and made black taxis semi
legal, since they were a fact of life already. They didn't have to build these
markets from scratch, they already existed and were just poorly organized.

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samstave
To me, this is the best point I've ever heard about uber.

Before I've in San Francisco I used to have a number of black cab drivers in
my contacts.

We had set, agreed on prices for trips like "home to restaurant and back"

The prices agreed to were "low" by actual taxi rate standards and had the
convenience of just calling the Lincoln car directly to come get me...

I thought it was a win!! (I lived where cabs would NEVER come to get me [i was
banned by multiple cab companies] -- but then uber arrived...

Same black car service, no relationship building... And I paid a fucking
fraction of what I was before.

Uber is the best thing to hit transport prior to tesla.

Give me an uber based self driving tesla and I'll commit some % of each
paycheck to that.

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seanmcdirmid
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 everywhere in 2nd/3rd
tier cities, and often were your only private transport option.

~~~
JumpCrisscross
> _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?

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

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SilasX
It's just called that for historic reasons[1], referring to any illegal cab,
usually which solicits people for rides. They don't have to be of the Romani
people.

[1]
[https://en.wikipedia.org/wiki/Illegal_taxicab_operation#cite...](https://en.wikipedia.org/wiki/Illegal_taxicab_operation#cite_note-8)

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chvid
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?

~~~
tew28
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.

~~~
jmh42
The hack needed an extra rooted android phone and a special 'helper' app. It
also took advantage of the subsidy they give new users and the driver for new
users. (I have no idea if this has been patched)

Another subsidy I heard about gave about $1000 per week if you had over 80
rides. $4000 dollar subsidy a month goes a long way in China.

It really blows my mind that people think this is a sustainable business. Even
after you out-spend the competition, who's stopping someone from downloading a
new app from a new service? I've seen users in China blast all ride apps at
once and just take the first one to arrive. Subsidies won't buy loyalty.

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sea2summit
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.

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

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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!

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

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frozenport
>>first order of business was to move beyond the taxi roots and emulate Uber’s
model whole cloth

Typical Chinese approach. What options do companies have when this happens?

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Asbostos
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.

~~~
adventured
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).

~~~
fspeech
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/](http://fortune.com/2015/09/30/will-china-be-ubers-waterloo/)

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

