Out of the 1.2 million taxi drivers in China, there are about 67,000 taxi drivers using taxi-finder app Didi Dache

I Lost My Virginity to a Didi Dache Taxi Driver That Cold, Rainy Night

June 28, 2013

by Vanessa Tan

The weather in Beijing has been gloomy of late, and just when I was queuing up to buy some cheap egg tarts along Houhai for friends visiting Beijing, it started pouring with rain and we had to head home. Because of the rain, it was a battle to find a spare taxi along that busy street. In a bid to show off that I’m a tech-savvy chick, I whipped out my phone and fired up an app I could use: Didi Dache (嘀嘀打车).

Didi-Dache-720x341Taxi-Finding-Apps-Infographic-264x1024Like a virgin

A friend of mine first recommended the Didi Dache taxi-finder app to me, and was mildly amused when he said that a code is assigned to each taxi booking (pictured right) that needs to be verified with the taxi driver before he/she lets you on board. And if the taxi doesn’t show up after hailing that cab via the Didi Dache app, he/she gets a bad rating, as displayed on the driver’s profile within the app.

The first time you use the Didi Dache app – as with many rival apps – you will be required to fill in and verify your phone number, and are then brought to a page which asks if you require a taxi now or later. Being already half drenched I opted to book one right now; and then the app asked how much you would like to give the taxi driver on top of the fare (in increments of RMB 5, RMB 10, and RMB 20, which is about $1 to $3). You will also need to indicate how long you’re willing to wait (like, ten or 30 minutes), and then send a voice message (you’ll need to be online since, I was told, the app monetizes from mobile telcos and data usage) to tell the driver where you are and where you are heading to.

I chose to give an additional RMB 5, but unfortunately no taxi driver was willing to pick me up despite saying my request in the most seductive voice possible. I was then prompted by the app to increase the offer, which I did, and finally got a response when I reluctantly decided to add RMB 20 to the regular fare. The app will then show the details of the taxi driver, such as his last name, license plate number, the taxi company he represents, and his ratings from other users of the app. There is also a button where you can call the taxi driver on his phone.

Finally, my assigned taxi arrived. So as everyone tried to clamber into the taxi that belonged to me, I gave a triumphant smirk and said that the taxi was pre-booked online. Curious Beijingers asked what app I used to get hold of the cab. Given that the taxi driver did honor his promise of picking me up, I gave him a good rating.

Beijing and Shanghai supposedly banned these extra fees in May, permitting taxi apps to be used by driver only if no extra charges are applied for consumers. But, as we’ve seen, these extra charges are still happening. I asked a couple of taxi drivers about the ban. They said even if authorities implemented the ban properly, it was difficult to regulate the whole new taxi app industry. But nationwide regulation is a possibility.

They see me rollin’

According to my cab driver, most drivers would not pick up a passenger via the app who is only willing to give an extra RMB 5 unless both parties are serendipitous enough to be really close to each other. He rationalizes that for one, by the time he gets there, there’s the likelihood the passenger might be picked up by other passing taxi drivers. Secondly, he might be able to find other passengers along the way. But then if he doesn’t honor the jobs from Didi Dache, he’ll be whacked with more bad ratings.

In fact, while I was trying his version of the app (yes, the driver gets a slightly different version of the app that us customers usually don’t see), he cautioned me time and again to be careful not to agree to jobs listed on the app. But the taxi driver very kindly allowed me to play with his version of the app anyway. It works by first notifiying the cabbie with a cute di di sound that tells you when new jobs are available. You can see the list of jobs that are close by in the location-based app and also it also plays the voice message sent by passengers. There’s also a board which shows the ranking of various taxi drivers within the Didi Dache service and the number of requests he has accepted. Top drivers are rewarded. Prizes include laptops, electric fans, and laundry detergent. Taxi drivers can also see his or her own profile which tells them about his ratings, how long he has been connected to the app, his own ratings, and how many requests he has accepted.

Why this app?

 

Regular followers of our blog will probably have read reports on numerous taxi finding apps in China such as Kuaidi Dacheand Yongche’s Dache Xiaomi; taxi finding apps are a hot topic here in the Chinese startup ecosystem. And in my conversation with the taxi driver, he tells me that Didi Dache is a favorite for most of his driver friends. According to an infographic extracted from DCCI’s Weibo (pictured right) andSina Tech, Didi Dache comes out tops among taxi drivers in most cities where they operate (though not in Hangzhou). In fact, out of the 1.2 million taxi drivers in China, there are about 67,000 taxi drivers using the app thus far.

Didi Dache also has the largest number of passengers. As of April 2013, the Android download figures stand at approximately 431,000 downloads, with Yaoyao Zhaoche and Yi Dache trailing behind at approximately 246,000 and 175,000 downloads respectively. It is especially popular in cities such as BeijingShanghai, and Wuhan. Encouraging figures given that the app has only been in the app store for eight months.

Let’s talk about the demand here. The infographic also shows that Didi Dache triumphs in terms of the average number of daily taxi orders, and especially so in first-tier cities such as Beijing, Shanghai, Guangzhou, and Shenzhen.

But at present, regulations are not in place for taxi-finding apps nationwide, and hence if strict regulations are drawn up, taxi app startups could be in peril, as we’ve already seen in Shanghai and Beijing. Yes, the startups don’t monetize from that extra fee (the drivers keep all of that), but without that surcharge, a lot of the motivation to use such apps is gone. But there’s hope.

Money not exactly the main motivation for taxi drivers

Admittedly, the idea of having extra money is the reason why most taxi drivers choose Didi Dache and the other available apps. According to the taxi drivers that I’ve spoken with, installing the app does not guarantee taxi drivers higher incomes. There are also other reasons why cabbies are opting to use the app.

From DCCI’s Sina Weibo page, there are three other reasons behind taxi drivers being keen to use the app’s service:

Shortens the idle time when taxi drivers are driving aimlessly looking for passengers. With the app, it allows the drivers to know who are the passengers nearby, which greatly increases the productivity and efficiency of drivers.

The entertainment factor. Interestingly, many of the taxi drivers told me it “kills their boredom” using such apps. There is a level of fun and interaction between the two parties. In fact, one of the taxi drivers I’ve spoken with said that he derives some form of joy listening to people saying their requests, especially when they are driven to the point of desperation by not finding a ride.

Social psychology. With more installs and positive word-of-mouth from friends, they are more inclined to install the app based on recommendations from fellow drivers.

Of course, these apps are really useful for us city dwellers without a car. It would be a pity if China’s authorities clamped down on these apps and tried to create their own alternative systems instead. That might just happen.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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