November 30, 2022
From Transform Europe

The Shenzhen Urban Transport Planning Center (SUTPC), a powerful institution that manages traffic in the city, plays a key role. The SUTPC was founded in 1996 as a “national high-tech company in the field of urban transportation research” that, by its own account, has matured into the “provider of total urban solutions”. The data that accrue in the city are important resources in that process; Shenzhen is a global leader in analysing its population’s smartphone GPS data and digitising its transport infrastructure.

Journalist and China specialist Wolfgang Hirn writes that “Shenzhen’s car policy is a model of cooperation in this city: the city administration works together with state-run and private business. Every cog interlocks.”

Didi Chuxing: bigger than Uber

The ride-hailing operator Didi Chuxing is considered the Chinese Uber. Its app allows people to book rides in private cars and taxi. The Beijing-based start-up was the product of a merger between two existing companies.

Competition with Uber ended in 2016, when Didi Chuxing took over all of Uber’s Chinese business and gave it a percentage share in Didi. Didi Chuxing is valued at 56 billion US dollars and its business also includes deliveries and bike sharing.

The company is working with auto manufacturers to expand its electric fleet and experimenting with a driverless transport business. In just a few years, Didi has become the world’s leading transport technology platform.

Didi Chuxing handles around 25 million rides in Chinese cities every day, which is twice as many as all other ride-sharing companies globally combined. It has an estimated 15 million drivers under contract and they support over 550 million users daily.

It offers eight different types of rides, including the discount express rate, which guarantees air conditioning and an electric vehicle and costs about 17 yuan (roughly 2.38 euro) for a six-kilometre ride. Within China, Didi has “completely changed people’s attitude toward using taxis over private vehicles”, write professors Boidurjo Mukhopadhyay and Chris Chatwin.

Platform labour with no rights

Since it was founded in 2009, Uber has been criticised for the poor working conditions of its drivers (most of whom are formally self-employed), opaque communications and pricing, data leaks, and abuse — the list of transgressions is long. Moreover, transport research has repeatedly shown that the spread of Uber’s business model has resulted in increased traffic and drawing people away from public transport.

The situation with Didi Chuxing is very similar (and other platforms in China, like the very popular delivery services). Criticism of its monopolistic position, drivers’ dependency and isolation, poor working conditions, and a lack of rights are endemic. Just like Uber, there have been cases of assaults against passengers. Moreover, drivers’ self-organising efforts have been suppressed.

An estimated 83 million people do work through platforms in China, but only five million of them are employees. For a long time, working as a casual labourer with scarcely any rights and no contractual regulations at all was a common way to earn a few yuan. In November 2020, workers at the delivery service Kuaidi went on strike in several cities over back wages and pay cuts due to competition between express delivery companies. Because the workers had no formal contracts with the company, they had few legal options at their disposal.

In response to growing public criticism and a series of high-profile cases, the Chinese Ministry of Human Resources and Social Security published new guidelines in July 2021 in order to strengthen the rights of platform workers and standardise contracts. According to Chinese platform-economy expert Chris Chan, who researches labour markets in Hong Kong and China, the guidelines defined the concept of an “incomplete employment contract” and articulated and implemented basic labour protections for platform workers, including a minimum wage and accident insurance.

Crackdown: state regulators strike back

As Chinese regulatory authorities have worked to curb digital corporations in general since early 2021, even Didi has felt the power of politics: last year, the Chinese government initiated a harsh crackdown on the company. It followed on the heels of Didi’s listing on the New York Stock Exchange (NYSE), where the company had garnered a 4.4-billion-dollar IPO, the largest by a Chinese business since Alibaba.

Shortly thereafter, the State Administration for Market Regulation (SAMR) began investigating Didi for its pricing and competitive practices. On 4 July 2021, the Cyberspace Administration of China ordered app stores to remove Didi due to its violations with respect to collecting and using personal information. Some 25 apps subsequently disappeared from app stores, which means that Didi has been unable to solicit new customers since then.

On 8 July 2021, Chinese regulatory authorities handed Didi a 8.026-billion-yuan fine (1.2 billion dollars) for allegedly violating the country’s anti-monopoly law. The company’s stock price subsequently crashed.