Didi Kuaidi, the “Uber of China”, is in a public relations predicament in its local market after the app introduced what they call “dynamic extra fee” to passengers’ cabs that varies according to the traffic conditions, location and many other factors. The ‘feature’ mirrors that of rival Uber, which uses ‘surge pricing’ to dynamically price fares during peak demand.
Just like Uber’s users, Didi Kuaidi customers felt deceived by the car-hailing app, which has approximately 80% of the market under its control. Didi Kuaidi’s social media page on Weibo was filled with many comments of passengers expressing frustration. Over the weekend, the news spread rapidly across national media.
One post on Weibo said, "So, Didi Kuaidi killed taxi business monopoly in China and now Didi Kuaidi becomes the biggest monopoly [in the taxi business]"
Didi Kuaidi staff worsened the situation when they told national media that the so-called “dynamic extra fee” would be determined by what they called the “big data” structure without caring to explain how the “big data” system functioned in determining the increase in price. Complaining, some passengers said that their rides had become more costly than using ordinary taxis and they considered reporting the incidences to the transport regulation department.
About two months ago, considerable public opinion supported Didi Kuaidi against local transport regulators because a majority of the passengers thought it could provide them with an easier alternative way to access cabs at lower costs.
Currently, passengers have opted to turn to the transport regulators for totally different reasons – wanting the local regulators to intervene and tame Didi Kuaidi in good time.
A “sharing economy” is a popular concept that has various definitions. It could be interpreted to mean that a service provider works in conjunction with various parties such as the government, individuals and different institutions to re-distribute and share available resources in furtherance of high living standards or other reasons. Irrespective of the types of services, a “sharing economy” is expected to be a win-win, meaning that consumer satisfaction should be prioritized.
The “big data” excuse given by Didi Kuaidi does not justify the price increase nor does it sound satisfactory. On the contrary, it sounds like the outdated enterprises owned by the state and having 100% market share.
Like Uber, Didi Kuaidi could replace traditional taxi monopolies yet it remains to be seen just what the industry will look like if controlled by cab hailing apps. The natural tendency for one or two players to dominate opens up opportunities for price gouging - the same behavior the apps were supposed to stop.