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Winter for Ride-Hailing Industry is Coming?

2018-12-28 09:14 Friday


Chengwei, CEO of DiDi Group, noted at the annual meeting that in order to counteract the huge costs in security sector, DiDi's year-end bonus will be slashed by half, and executives or above will have no year-end bonus. The announcement has raised public concerns about the ride-hailing platform's profitability as well as future development.

DiDi

DiDi president Liuqing also joked:"I bet those who just got promoted to VP must be regretful."

Year-end bonus in Didi are classified into 3 levels: Level A for 6 months' extra salary, level B for 4 months and level C for 2 months.

"All my colleagues are disappointed at the bonus cancellation. We used to work overtime to get a higher-level bonus, but now we don't work so hard since the bonus is cut by half."

DiDi went through several security incidents in 2018, which resulted in severe public criticism as well as government's supervision. To tackle the crisis, DiDi canceled the lucrative Hitchhiking business, and employed a series of security measures to safeguard passengers' safety.

Furthermore, the company also promised to put "safety system update" as the top priority. DiDi even nominated a new chief safety officer and established an emergency case team.

Ride-Hailing Industry

Ministry of Public Security and Transport released a joint notice this September, stipulating that all the unqualified and illegal drivers and vehicles must be eliminated by 31st December, otherwise the drivers may be fined 50,000 RMB at most.

Meanwhile, the ride-hailing platform reduces its incentive for drivers while introducing higher requirements on drivers' qualification, leading to a slack period within the whole industry.

In light of the low-speed and even negative growth within the traditional auto industry, many auto manufacturers, including BMW and Daimler, start their foray into ride-hailing business.

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