Didi’s tough time

Ever since the second (over three months) murder of female passenger on Didi’s ‘hitchhiking’ service in China, the leading ride hailing company in China has been under immense pressure.

Especially when the news emerged that the customer service showed no sense of urgency and might have missed the opportunity to save the victim. What particularly exasperated the public was that Didi’s promised improvements after the first murder were nowhere to be seen.

Some experts argue that for such a big platform, it was normal to have a few incidents – in fact, without such platform it would be more dangerous for the passengers. Alas, this does not gel well with the public’s anger.

A dating app?

It is not easy to argue that Didi was not at fault. A key promotional method (and product feature) of its hitchhiking service is that people can “make friends” with each other.

In fact, Didi’s made no secret that it is intended to be a dating function.

Didi’s earlier ads on Chinese Valentine’s day suggested that Hitchhiking is the “biggest mobile dating festival in history”, which has “zero entry barrier, zero distance” and is “most fashionable and most disruptive”.

It is not hard to see what this leads to.

Below is a quote from Huang Jieli, General Manager of Didi Hitchhiking, back in 2015:

“Just like boutique cafes and bars, private cars can become a semi-closed venue for socialising. This is a very futuristic, very sexy use case. We were very clear from the very beginning that we would attack this area.”

Huang was promptly sacked after the latest murder case.

Didi also suspended its Hitchhiking service, and on 8 September, suspended all services between 11pm and 5am. Some conspiracy theorists believe that it was a deliberate move to let public know how it feels when Didi is not available, a more practical rational is probably that they do not want to risk another accident during this sensitive period.

Governments hate Didi

Multiple municipal authorities across China also demanded Didi to clean up its act immediately or face suspension in the respective. Momentum Works did a few consulting projects for municipal transport bureaux in Southern China last year, and we could strongly feel how local authorities hated Didi.

Today, the central government (Ministry of Transportation and Ministry of Public Security) made it clear that all ride-hailing platforms must stop using any social function and protect the passengers’ privacy. It also demanded local authorities to immediately inspect all ride hailing companies, and build fast-reaction mechanism for incidents.

The central government also sent inspectors to the seven major ride hailing companies.

Official from the National Development & Reform Commission also criticised Didi for not informing the government 30 days in advance for suspension of its midnight service. In fact, the government was notified at all.

One of our good friends used to work at Didi’s Government Relations team, and he complained a number of times that it was the hardest job within Didi. It seems not to get any easier, from the conclusion we drew two years ago that Didi’s war was far from over.

It will prevail, still?

However, Didi is too big to fail, and its entrepreneur team has been through a lot – there is no reason to believe they can’t sail through this storm.

However, it is now even harder to justify an IPO valuation it hopes for.