China's Ride-Hailing Boss Didi Eyes Profit Booster Out of Safety Upgrade
Qian Tongxin
DATE:  Aug 27 2018
/ SOURCE:  Yicai
China's Ride-Hailing Boss Didi Eyes Profit Booster Out of Safety Upgrade China's Ride-Hailing Boss Didi Eyes Profit Booster Out of Safety Upgrade

(Yicai Global) Aug. 27 -- Ride-hailing leader Didi Chuxing is re-evaluating its safety and testing the trust of its users after the weekend's murder case where a driver killed his passenger. And yet the firm aims to reap profits out of security upgrades.

Didi has suspended carpooling service Didi Hitch, the Beijing-based firm said after the incident. Didi has added shortcuts to the three national emergency numbers of 110, 120 and 122, as well as the firm's 24-hour security hotline. However, Yicai Global only found the 120 button on the platform for calling an ambulance and noticed that this click led to a page for buying additional services for three-month (CNY12 or USD1.8), six-month (CNY16) and 12-month (CNY18) periods of such coverage.

A female passenger was murdered in Wenzhou in China's eastern Zhejiang province at 1.00 p.m. on 25 Aug., around one hour after she sent a message to a friend asking for help. Police have recovered the body and apprehended the driver, who confessed to the rape and murder of the woman. This marks the second fatal assault since May on the firm's carpooling service.

"One-key police calling that synchronizes information with the police is actually easy to make, and it can solve many urgent problems to a great extent," an observer of the internet industry told Yicai Global.

If Didi fails to restore its users' trust with a paid sense of security, rivals such as Meituan-Dianping's car-hailing platform Meituan have a good chance of picking those misbelievers from the curb. "Chinese users can have other alternative apps, which will obtain some users from Didi if they optimize their service experience by this chance," said Bill Russo, chief executive of consultancy Automobility.

The number of car-hailing users in China has risen to over 500 million, while the scale of China's private passenger car market is around 200 million. "The market of demand-based car use came out because of factors like traffic jams in cities and inadequate public traffic services," Russo said, adding that despite regulation over platforms like Didi, densely populated cities still see a booming demand for car-hailing.

Another Asian ride-sharing operator Grab said that in the face of these intolerable accidents, it would spare no effort to clear out these underperforming drivers and conduct verification through selfie-based registration. Didi has invested in Singapore's Grab, which has raised some USD6 billion in over ten funding rounds, as well as bought out Uber's business in the Southeast Asian market.

Didi may also learn from Uber's pitfalls in Europe, as the California-based firm smeared its image with the lack of responsibility after hiding over 100 sexual assaults that happened during rides. Uber lost its license in London last September partly due to flaws in security and withdrew hitching services in several European countries including Sweden, Germany and France, while failing to comply with regulations. In June, the firm regained its license to drive in London for a trial period of 18-months.

"We are changing the way we do business, putting integrity at the core of every decision we make and working hard to earn the trust of our customers," said Uber's director for southwest Europe. Perhaps Didi should do the same instead of focusing on ways to make money out of security nets before China's regulators snap the cord due to assaults caused by insufficient supervision.

Didi is investing in futuristic fronts that may prove safer. The firm started a USD1 billion unit called Xiaoju Automobile Solutions that "marks a new attempt of innovation mechanism to support Didi's fresh business development," according to Chief Executive Cheng Wei. The subsidiary will invest in new technologies such as autopilot, which may remove the one big risk factor that sits behind the wheel.

Editor: Emmi Laine

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Keywords:   Didi Chuxing,Carpooling,Ride-Hailing,Uber