Didi’s rapid expansion hits as millions laid off throughout China

Global Business

Didi's rapid expansion hits as millions laid off throughout China

Earlier this week, Uber threw in the towel in China and sold its operations their to rival Didi. Uber had spent years battling Didi, highlighting just how commercially important the ride-sharing market has become. Didi is also becoming an important employer at a time when millions of Chinese workers face redundancy.

CCTV America’s Owen Fairclough reports.

Didi\'s rapid expansion hits as millions laid off throughout China

Didi\'s rapid expansion hits as millions laid off throughout China

Earlier this week, Uber threw in the towel in China and sold its operations their to rival Didi. Uber had spent years battling Didi, highlighting just how commercially important the ride-sharing market has become. Didi is also becoming an important employer at a time when millions of Chinese workers face redundancy. CCTV America's Owen Fairclough reports.

There are 14 million Didi drivers across China. Nearly a third of them are from provinces where so-called zombie factories and coal mines that have saddled the government with billions in debt are being shut down.

This will lead to up to 6 million redundant workers. Didi said it’s scooping them up.

“Didi’s sharing economy offers a lot of job opportunities for workers that had lost their jobs in overcapacity industries,” Lin Kang, Didi government affairs officer, said. “Low-threshold employment provides them with temporary jobs. The macro-economy is in a growth trough, and Didi can offer a financial buffer for laid-off workers.”

Kang turned to Didi to become a driver when the Shanghai trading company where she worked went bankrupt. She now earns around $1,500 a month.

Despite the good earnings, drivers are now suffering from a price war. Didi and Uber used bonuses and subsidies to lure employees, but are now phasing them out.

“My daily bonus dropped from 500 yuan to 350 yuan, and the weekly bonus for every 69 orders dropped from $75 to $60,” Kang said. “The rewards multiplier working morning peak hours was cut from 2.4 to 2 times, while in the evening, it’s been cut from two to one.” 

Didi is expanding quickly, aiming for up to 10 million drivers, serving 30 million passengers every day by 2018. For the government, this helps fill an unemployment void as it turns the economy away from loss-making state manufacturing to more competitive service providers such as Didi.

 


Max Wolff on China’s economic restructuring and the growth of the sharing economy

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