
Uber Slayer: How China’s Didi Beat the Ride-Hailing Superpower - srunni
https://www.bloomberg.com/features/2016-didi-cheng-wei/
======
3pt14159
This is just a Bloomberg PR piece. China has a plan for the internet: Don't
let outsiders control critical IT infrastructure / personal data.

> It was widely suggested in press accounts that the Chinese government helped
> Didi in its battle against Uber. Cheng rejects that, noting that as the
> largest ride-hailing company, Didi had to shoulder most of the regulatory
> burden and paid tens of millions of yuan to cover driver traffic citations
> and other fines.

Here in 2015 is the president of Didi talking about the strong government
support they received:

[http://video.cnbc.com/gallery/?video=3000395252](http://video.cnbc.com/gallery/?video=3000395252)

I'm not criticizing them, if I were China I wouldn't want the USA in charge of
that either, but let's not pretend this was a level playing field.

~~~
smitherfield
A thought that occurred to me recently, is that the main purpose of China's
"Great Firewall" isn't so much silencing dissent[0], as it is protectionism.

By making it effectively impossible for foreign (i.e. American) internet
companies to operate in China, they've ensured that the spaces occupied by
Google, Facebook, Twitter, Amazon, Uber, and even to some extent Microsoft
have been filled by Chinese-owned and China-based companies.

[0] Although that too, of course.

~~~
usaar333
Oh definitely.

The interesting trade-off though (as with all protectionism) is where the
boundary between promoting and hindering innovation is.

VPN blocking Facebook probably has good ROI for generating internal social
networks (which in turn can be monitored).

Blocking Google, even more so GitHub, seems far more dangerous economically as
you impair innovators' abilities to obtain research done abroad. (Google is
especially bad since a large percent of English language sites have Google
dependencies (css/js hosting) -- effectively most of the English internet has
become unusable in China without a VPN since the complete *google.com block
went in).

------
usaar333
The article is rather light on details on what Didi actually did better, but
from using Uber as a foreigner in China, I could see significant problems in
Uber's product execution:

1\. The Android app continues to use Google Maps which is Great Firewall
blocked, meaning I had to use a VPN to load uncached tiles.

2\. Uber in turn IP blocks EC2, preventing me from using my main VPN while in
app.

3\. Entities on the map are shifted by the GCJ-02 offset
([https://en.wikipedia.org/wiki/Restrictions_on_geographic_dat...](https://en.wikipedia.org/wiki/Restrictions_on_geographic_data_in_China)),
meaning entities on the map are shifted by 0.5 miles (look at those cars
driving on parkland:
[https://www.dropbox.com/s/hhkrjyka5uq0pfb/PeopleUber.png?dl=...](https://www.dropbox.com/s/hhkrjyka5uq0pfb/PeopleUber.png?dl=0))

4\. User support was absolutely non-existent. After I responded to an
automatic email from the local community manager inviting me to ask any
questions, I only received an automated emails telling me I won't be helped.

5\. Help pages in the app on Uber China tell me to see the Chinese
translation, with no actual link to said translation.

While the foreigner use-case in China is niche, the sheer amount of obvious
(and easily resolvable) problems I ran into suggests that Uber has
organizational problems ensuring both drivers and customers have good
experiences in foreign countries.

One blog from Jan 2014 highlights how bad the execution was at launch:
[https://www.larrysalibra.com/5-problems-with-uber-in-
china-a...](https://www.larrysalibra.com/5-problems-with-uber-in-china-and-
why-i-love-it/) \- the most absurd being that Uber (at that time) only
accepted US-branded credit cards which few Chinese nationals hold.

~~~
tluyben2
For 1 & 2: when was that as for the last 1.5 years at least they use Baidu and
it works fine. 3 yes indeed, very annoying. 4. In the west support is good:
from China they just do not respond unless a driver screwed me on purpose
(doing the ride without me in the car which happened a few time): I would
receive no mail but the amount paid would be set to 0 rmb. 5. Even most car
brand names are in Chinese now it seems.

What we find most annoying that I always set pick up as an intersection of two
streets (fuxing/wulumuqi but in Chinese) and then stand on the corner and yet
they always call to ask where we are. We are on the f*cking corner I entered
and we do not speak Chinese very well so a mumbling guy does not work well.
They stopped allowing you to send sms to the driver, like you can in other
countries which would allow to send google offline translated details... so
often they just cancel the ride because we cannot explain. Uber Black still do
their best so usually that is the easiest.

Last year things were definitely easier. Drivers were doing their best more
for foreigners, you could sms and they would not call before, they would just
pick you up.

A big pet peeve is with Google and maybe someone here knows how to fix it; I
use Google Translate with offline translations but when you are online, even
though Google cannot be reached, it will try to do it online. It is beyond
annoying when you quickly want to translate something, you have offline
installed and yet it will just hang trying to reach the mothership...

Edit: now that I have access to Google to search for my Translate issue, I
will give Netguard a go.

~~~
usaar333
1/2: Are you on iPhone or Android? I was there a month ago and my Google
Playstore downloaded variant only used Google Maps.

Great point on the driver calling being an issue for non-Mandarin speakers. I
also experienced this. I actually asked drivers why they do this and
apparently riders seem to put incorrect location information in -- this in
itself indicates there is _some_ problem.

Regardless, I don't begrudge Uber much here; the driver call culture is hard
to fix (even in America, I'm called sometimes) and it's not unreasonable to
require your customer base speak the local language. (It is unreasonable
though for the phone app to assume your locale matches the local language
[help screen problem] or to assume that you've downloaded the app from a
completely local source [Google maps source issue])

~~~
tluyben2
> 1/2: Are you on iPhone or Android? I was there a month ago and my Google
> Playstore downloaded variant only used Google Maps.

Android. But my wife has iOS and that works as well?

> egardless, I don't begrudge Uber much here; the driver call culture is hard
> to fix (even in America, I'm called sometimes) and it's not unreasonable to
> require your customer base speak the local language. (It is unreasonable
> though for the phone app to assume your locale matches the local language
> [help screen problem] or to assume that you've downloaded the app from a
> completely local source [Google maps source issue])

Agree, but not being able to SMS while you can in every other country IS
something to begrudge Uber for. If I could immediately SMS with a perfect
Chinese sentence explaining where I am, which is how I always do it in
countries I don't speak the language (well), then this saves all the hassle.
They should put that back immediately. In Hongkong it has it (as it has it
everywhere else) and the driver never calls...

------
polemic
Uber's problems extend far beyond China. While the app is nice, its the cheap
fares that bring the vast majority of users to Uber, vs competitors or plain
ol' taxis.

Those cheap fares are artificially low, funded by SV money and ignoring
regulatory issues. But money does run out (or investors want a real return
eventually), and regulators either change the law (nullifying their advantage)
or crackdown completely.

Uber's network effects are almost non-existant. Every small geographic market
has to be fought and won the hard, and expensive way. And when the money runs
out and the fares go up, there is no market lock-in. Barriers to entry are
_low_ , potential competitors include anyone with a car, Uber just doesn't
have a way to lock in market dominance.

Which is probably why they're rushing toward driverless vehicles as fast as
they possibly can. Their own staff are an existential threat so they have to
remove them as soon as possible. Except that puts them in direct competition
with a whole range of extremely well funded, and well connected industry
players.

So. Good luck Uber, this is just an example writ large of where Uber is
heading in the not to distant future.

------
the_common_man
For those crying wolf about protectionism...

In general, I think most nations should have more closed door policies like
China. My country (which won't be named) does not have a startup ecosystem
anymore and we have become a consumption ground for one silicon valley startup
after another. Instead of fostering local startups and paying some money
(since many bootstrap and do not have big pockets), all the companies just
take the freebies of silicon valley startups. We had a local chat start up but
slack ate their lunch. Everyone here just uses the slack free tier. How do you
compete against free?

Eventually, this has led to all the data of individuals and companies on US
soil (or wherever those startups feel like stashing the data). We have no
control or say over it. If we are to look for alternatives, there is none in
our own country.

And for those who think the world is one giant land where everyone can roam
freely, it's impossible for me to move to any of the western world because of
visa restrictions. And US has the harshest work visas on the plante.

~~~
bpodgursky
> We had a local chat start up but slack ate their lunch. Everyone here just
> uses the slack free tier. How do you compete against free?

The point of division of labor (aka how civilization got built) is that it's
not _necessary_ to spend time re-doing the same thing others are doing. Slack
is giving you something for free that you don't _have_ to spend time or money
building now.

Now you have X engineers free to work on something actually innovative, not
just a clone of X, and getting a cheap/free service from slack.

The point of economic policy should not be to produce pointless jobs.

~~~
Fricken
Nations, communities, individuals: they value autonomy. Building their own
networks rather than submitting to whatever is being fed by silicon valley is
not a pointless job.

~~~
tekromancr
Apparently not, otherwise they would have used the locally produced. But they
didn't, they chose the freebie SV tools.

------
readhn
I completely understand Chinese (or any other country) entrepreneurs, why let
some foreign company come in and take all the money (ultimately a lot of it
outside the country) when you can do the same internally. The idea is not a
rocket science, all about execution. And locals know the specifics of China
more than a bunch of silicon valley grads.

Cheers to these guys for making it work in China. And Good luck to Uber
fighting strengthening competition all around the world.

~~~
aianus
> why let some foreign company come in and take all the money (ultimately a
> lot of it outside the country) when you can do the same internally.

Because those engineers and entrepreneurs could have spent their time
producing something globally new and innovative instead of creating an Uber
clone. Then they could have sold that new thing to the world and everyone
(global consumers _and_ the aforementioned Chinese) would be better off than
the status quo.

~~~
notahacker
Or - considerably more likely - they could have created a significantly less
successful Uber clone, like many engineers and entrepreneurs have managed in
other countries where Uber operates. I mean, if it were that easy to come up
with revolutionary new business models that the entire world needs, we
wouldn't see quite so many cookie cutter startups in Silicon Valley either...

Actually, the more plausible arguments against protectionism and state aid for
favoured corporations are the precise opposite to the one you're making: _it
's good for consumers to have a wider choice of ride-booking apps_, and not a
choice guided by the government. If the ridesharing apps are likely to tend
towards being a monopoly anyway then there certainly are advantages to having
it a locally owned and run one.

------
JumpCrisscross
Giving an American company where your people are, where they are going and
with whom they are likely meeting and traveling was a non-starter _before_ we
confirmed every Tom, Dick and Harry at a three-letter agency has the ability
to stalk their - and anybody else's - kids and ex girlfriends.

------
FT_intern
through anti-competitive policies?

~~~
vkou
What kind of anti-competitive policies?

Dumping their product below-cost?

------
jimjimjim
china is a difficult market. if it wasn't for the perpetual carrot of 1
billion consumers i doubt many would bother.

------
1_2__3
Wait, so we're supposed to believe this was some kind of merit or business
acumen thing? Is anyone really that gullible?

------
bigdrum
[http://](http://)

