You may not have heard of DiDi Chuxing, but DiDi has certainly heard about you – or at least about the South African market. It is China’s largest app-based ride-hailing service, having bought Uber China in 2018 to take 80% of that market. It claims 550-million users in 16 countries, and is now adding South Africa – no doubt spurred on by the fact that Uber and Bolt between them have several million users here.
Bizarrely, it first launched its service in South Africa’s sixth biggest city, Gqeberha, while billboards at Cape Town International Airport declare it is coming to the mother city.
It has already set itself up as a fierce competitor to Uber and Bolt, with prices for its Go service that match Uber’s low-cost service, Uber Go, although still above the Bolt equivalent, also called Go.
A comparison of a ride from the former Port Elizabeth International Airport, now named Chief Dawid Stuurman International Airport, to the Radisson Blu Hotel in Gqeberha provides a stark picture of the challenge facing drivers trying to earn a living from ride-hailing apps.
DiDi Go quotes R68, Uber Go R67, and Bolt Go R54. The UberX service would cost R83, and the regular Bolt service R76. The idea is that one pays less to ride in a lower-level vehicle. The truth, however, is that these are often the same vehicles, with drivers making themselves available on the lower-cost services merely to get the business.
As a result, ride-hailing pricing is a race to the bottom, with passengers the big winners and drivers the big losers. Literally. They can actually make a loss from carrying passengers at the rock-bottom fares, but do so to maintain their presence on the app, and in the hope of getting longer rides. In Gqeberha, the rides are seldom much longer than the 10 minutes or 6 kilometres to one of the city’s leading hotels.
Of course, competition is always a good thing, helping grow the economy and jobs. The key is that unfettered competition must go hand in hand with protection of both consumers and workers, and there is currently precious little protection for ride-hailing drivers, at least from an economic perspective.
Go to the next page to read about the new measures to protect drivers, and how the new service faces its own challenges in the mature South African ride-hailing market.
Every time Uber and Bolt have announced new measures to protect drivers and passengers from Covid-19 infection, they also seem to have announced new lower-cost services. While that is perception rather than reality, the drivers are increasingly less enthusiastic than their passengers. The friendly banter that has often characterised driver interaction with passengers has more often become a litany of complaints.
And that is before one factor in the antagonism from the minibus taxi industry, which has regularly resorted to vandalism and thuggery to ward off the more efficient ride-hailing competitors.
Even the technology startup-focused magazine TechCrunch has weighed in on the situation DiDi faces: “Although the nine-year-old company claims to understand how the ride-sharing industry works, the South African market, despite being a relatively stable environment with high economic potential compared to the rest of Africa, is a different ball game entirely.
“While Uber and Bolt dominate with a few million users, they regularly face regulatory challenges from the government, which feels the need to protect traditional metered taxis in the country. DiDi wouldn’t be exempt from this, but the timing to expand to South Africa suggests the company is looking to explore the present challenges facing Uber as its drivers push for worker rights.”
DiDi’s South African headquarters are located in Johannesburg, suggesting the service will quickly expand to the economic heartland of the country. It is headed here by “launch lead” Ken Liu, formerly with the Macquarie Group in Asia. According to a DiDi spokesperson, his team is “dedicated to rewriting the history of mobility in South Africa and making DiDi the most reliable, safe and affordable mobility platform”.
Its biggest challenge, it seems, is convincing drivers to be part of an even more affordable service.
“We started our DiDi journey in South Africa with our launch in Gqeberha, which did exceptionally well. With the Cape Town launch on our horizon, our goal is to do an even better job there,” said the spokesperson. “Today, as we are in the middle of the process of registering driver partners, their reception in Cape Town has been fantastic, reaffirming our decision that this was the right time to launch our platform in South Africa.”
DiDi has big plans for the rest of Africa, too, and will probably follow Uber, which has left its tyreprint in at least 8 major African markets.
“Our long-term goal is to serve the entire country and the African continent; wherever efficient mobility and access to economic opportunities are needed. We’re always looking at opportunities to help more people safely get to where they need to be.”
We asked what the difference was between DiDi and other e-hailing services, and received a response that could have applied to any of them:
“Firstly, DiDi is the world’s leading mobility and local services platform. We offer a full range of app-based services in 15 international markets. This allows us to enter the market with confidence, providing an affordable, safe and high-level tool for driver-partners and users.
“Secondly, we believe that mobility should be accessible to everyone who needs to safely get from point A to point B. Likewise, it should promote the entrepreneurship of our driver-partners and provide them with better economic opportunities, all while making use of advanced safety technology and excellent customer service.”
The bottom line, however, will be exactly that for the drivers: the bottom line. If DiDi ensures they are better looked after, it will have a better chance of winning the goodwill of both drivers and passengers.
* Goldstuck is founder of World Wide Worx and editor-in-chief of Gadget.co.za. Follow him on Twitter on @art2gee