Why it's so hard to hail a taxi in China?

Over the past ten days, many people in China, especially those in first-tier cities including Beijing and Shanghai, have been complaining that it takes over 30 minutes to grab a car through Didi Chuxing, China's premier online car and taxi hailing platform.

And beyond waiting times, the costs have often-times doubled.

Customer complaints

A media survey of 200 people from 22 cities shows that more than 36% respondents say they've been forced to wait an additional 10 to 30 minutes before a driver (of either a private car or a taxi registered on the platform) accepts their order.

This is compared with the time it took when there were no online hailing services.

Customers may spend much time on waiting before getting a ride. Photo: CRI

Over 60% respondents say it's been more expensive to use Didi these days, mainly because they have to pay "car-scheduling fees," which are actually tips, to drivers at the premium price. Those who don't pay the premium are often neglected by the drivers.

Most respondents say it costs much to use Didi compared with the fees they pay for taxies when there were no online hailing services. Photo: CRI

During peak hours, drivers appear to be ignoring passengers' requests until the value of the tip meets their demands.

Didi has confirmed the higher tips they pay, the more likely it is that customers will get a cab.

Reaction of Didi Chuxing

Didi Chuxing reacts via its official Weibo account on Monday. Photo: CRI

Didi Chuxing said on Monday it will periodically stop suggesting customers to pay tips on the taxi hailing interface to try to control the greed of drivers and ease demand during the "Chunyun," which is the annual 40-day travel period surrounding the Chinese New Year.

Didi is warning the move is likely going to mean longer wait times for taxis.

So why it's difficult to hail a car?

Luo Wen, Senior Product Director with Didi Chuxing, said the reason is an unbalanced relationship between demand and supply.

Luo said as the number of customers has been increasing since January 13th when the "Chunyun" started, while the number of drivers has dropped, with many of them already heading home for the Lunar New Year holiday.

Another reason behind the supply shortage is the government's new regulation that requires drivers to be locally-registered citizens, which excludes migrants to serve as Didi drivers.

On top of the lack of supply, Tan Jing, former co-head of Uber China's strategic operations, said the root cause is the way orders are dispatched to drivers on the platform.

The payment interface of Didi’s app reminds that the probability of getting a taxi would be 85.6% if a tip of eight yuan, or about $1.2, is paid. Photo: Didi Chuxing

Tan said drivers are fully-aware that their customers will have to pay tips to get through to drivers. As such, they're waiting out the customers.

How to deal with the problem?

Researcher Yuan Gangming says the market should be allowed to sort the problem out for itself.

If Didi Chuxing keeps offering expensive services with bad quality, consumers will begin turning to other options, including road-side hailing.

However, Cui Zheng, professor with Beijing Technology and Business University, says some form of government intervention may be needed.

Cui is recommending the government tighten supervision and management of Didi Chuxing in case the company exerts monopolistic behavior on the market.

"Do Didi's drivers pay taxes? Does Didi educate or assess the drivers on a regular basis like the traditional taxi runner does? These all need consideration and regulations," said Cui.

As for the company, Cui said as a giant operation, Didi should also have a social responsibility to ensure quality services for its customers.

(CHINA DAILY)