(Yicai Global) March 16 -- Drivers have started to leave Meituan after the Chinese food delivery giant said its ride-hailing platform is giving up on its investment-heavy stand-alone business model.
China’s largest on-demand services provider announced the move last week in order to save cash and manpower. Instead it will act as a hub for other ride-sharing platforms and itself.
Meituan relaunched its ride-hailing app in July 2021, attracting many drivers by giving away huge incentives and always ranking in the top 10 based on order volume.
Meituan-registered drivers are now trying to join other platforms, a number told Yicai Global. The adjustment was a surprise, according to the head of a Meituan taxi fleet surnamed Zhao. “There was a meeting at the end of February to expand the number of people in each team from 33 to 40,” he said.
After the Beijing-based firm discontinued its stand-alone ride-hailing service on March 6, most of the drivers known to Zhao began signing up with other platforms, with only a small number staying on with Meituan. The platform still sends out orders as normal, but the firm has canceled driver's incentives, he added.
It is unclear if and when the Meituan will stop sending out orders, Zhao said.
Although most drivers were caught off guard by the recent announcement, some picked up on subtle changes earlier. “Two weeks before the news, I noticed that the quality of orders issued by Meituan dropped, with most being for short distances,” said a former Meituan driver surnamed Cai.
After the move, Meituan’s ride-sharing orders slumped about 70 percent in the following week, Cai said. “Many passengers still use the service because they have coupons, but it's hard to say whether they will stick around.”
Ex-Meituan drivers in Shanghai are mainly switching to Xiangdao Travel, Didi Chuxing, and T3 Travel, the drivers said.
And not just individual self-employed drivers like Cai are leaving. Many who are employees of taxi firms are leaving the platform in droves, transferring their online registrations from Meituan to Didi or Xiangdao, he added.
Editors: Tang Shihua, Martin Kadiev