The once laughed-at P2P Ridesharing Model created RMB 800 Millions Profit for DiDi

"After the epidemic, we are about to receive 100 orders." Lu Yang, the owner of Shunfeng Motor. He once left the Shunfeng car platform due to reduced travel demand during the epidemic. His recent experience has been very good. Even if he receives new passengers who have only taken a few rides, he does not need to emphasize to the other party, "Don’t call me the master, we are I’m not a professional driver and I need your understanding.”

This feeling became stronger after the epidemic. Luyang’s intuitive feeling is that there are more orders along the way, and more people know about ride-hailing. "Because express and special buses are operated full-time, the drivers contact many people every day, and the real riders pick up orders for the ride."

Following the money-burning war in 2016 and the darkest moment in 2018, the ride-hailing industry has developed into its sixth year. In 2020, some people think it is the year of the restart of ride-hailing after the rectification period. However, when the public's vision is again When I focused on this industry, I discovered that the industry structure has changed.

One of the players, Didi, has repeatedly reported rumors of an IPO. It has gathered BAT, foreign technology giants, the world's top funds, and state-owned shareholders, and its valuation at its peak exceeded $50 billion. Due to continuous losses for more than 6 years, an investor once revealed that investors had already transferred Didi’s old shares in the market before. IPO was originally a good exit channel, but after the vicious incident, Didi’s IPO seems to have been Shelved indefinitely. Now with the return of the ride and the successive splitting of multiple sub-brands, speculation that Didi will be listed has once again appeared in the market.

Another platform, Dida Travel, also reported the news of listing in Hong Kong. According to its disclosed data, as of August 31, 2020, the number of registered users and registered car owners reached 180 million and 19 million respectively, and it has been 15 consecutive months. profit.

The top players have heard good news that they are going to be listed. Does it indicate that the downwind is about to enter the fast lane. Has the downwind industry that has gone through the dark period reached the stage of harvest? Has the industry problem been solved?

Industry Gone Through Big Changes

In the beginning, Luyang took the ride to save commuting costs. When he received 50 orders or 100 orders, he began to pay more attention to social benefits and travel experience than income.

During the period of barbaric growth in the ride-hailing market, the ride-hailing experience in Luyang was particularly bad. It often encountered passengers who "must depart at a certain minute, not one minute earlier" and who were 20 minutes late but were unapologetic. After that , He no longer chooses platforms with complex capacity and easy confusion for passengers.

As the impact of the epidemic gradually subsided, Luyang’s intuitive feeling is that there are more orders along the way, and more people know about the ride. "Because express and special buses are operated full-time, the drivers contact many people every day, and the real rides pick up the orders for the rides. Tick rides have a daily limit, and office workers generally only have two orders a day."

For a long time in the past, Didi, which has been reflecting on two years of continuous restart attempts in the ride-hailing field, has also been "restarting" the industry structure. Didi Travel, which started as a ride-hailing company, announced that it has obtained nearly 70% of the ride-hailing market share. The transcript was posted on the six-year time node: As of August 31 this year, the number of registered users on the platform has exceeded 180 million, and the number of registered car owners has exceeded 19 million.

The six-year development time is not short, and the downwind market has experienced twists and turns.

Shen Lijun, dean of the City Zhixing Information Technology Research Institute, divided the six years into three stages. From the end of 2014 to the end of 2016, it is the pioneering and exploratory period of the new business of Shunfeng based on the mobile Internet. The second stage, from the end of 2016 to the autumn of 2018, is a period of barbaric development along the way. In the third stage, after two consecutive vicious cases in the industry occurred in 2018, rational discussions about "true riders and false riders" emerged in the industry, and then the industry began to return to the stage of rational development.

Shen Lijun said that the nature of Shunfeng is different from that of online car-hailing. Online car-hailing is an undisputed operational nature, while Shunfeng is a mutual-assisted ride-sharing method for sharing the travel costs of private car owners. He suggested that no matter who the Shunfengche platform is, the first thing to consider is the issue of legal and compliance operations, that is, whether the platform is really smooth and whether it adheres to the two conditions of true smoothness and low pricing. Next, after achieving large-scale business growth, the profit model can be gradually clarified based on the strategic positioning of the platform.

Regarding the issue of profitability, Dida said that it has crossed the scale effect threshold and achieved profitability for 15 consecutive months as of August 31 this year. In this regard, Shen Lijun mentioned that Tide’s profit should be diversified, for example, it can be profitable by grafting financial or after-sales products.

Prior to this, Didi President Liu Qing accepted interviews with two foreign media at the beginning of this year. Both times, Didi's core business has been profitable.

In addition to the release of profit signals to the outside world, recently, the two top players have reported that they will be listed soon. It seems that the entire industry is moving towards standardization. The only variable is the industry pattern and who can take the lead in bringing good news.

P2P Ridesharing (traditionally known as Hitchhiking)

The story of the ride started in 2014.

At that time, Shunfengche had just integrated with the mobile Internet, and Beijing issued the "Opinions of Beijing Municipal Commission of Transportation on Beijing's Passenger Car Sharing Trips". After Yanjiao saw a large number of users' demand for ridesharing, Dida Carpool was established. At that time, the competition mainly took place on their respective initial tracks. Didi was competing with 51 cars and Tiantian cars, and Didi was competing with Kuaidi and Uber.

In the middle of the second year, Didi began to enter the ride-hailing market, and Didi and Dida have experienced a year-long battle for subsidies for burning money. By mid-2016, both parties basically maintained a half-share of the ride-hailing market.

Two months later, two major events occurred in the industry.

One is the "Guiding Opinions of the General Office of the State Council on Deepening Reform and Promoting the Healthy Development of the Taxi Industry", also known as the "2016 [No. 58] Document issued by the State Council," which regulates three things, how to Transformation and upgrading, how to standardize the development of online car-hailing, regulate the definition and essential characteristics of ride-hailing.

The other is the largest merger and acquisition in China's online car-hailing industry, when Didi and Uber China merged. A practitioner in the ride-hailing industry believes that after the merger, Didi introduced the new standard of transportation capacity that cannot enter the express terminal and the passengers who wish to continue affordable travel after the subsidy is cancelled. In bad situation.

In 2018, we experienced two consecutive killings of ride-hailing drivers. Didi ride-hailing business was required to go offline by the competent authority. Six departments interviewed 8 ride-hailing ride-hailing platforms. It is strictly forbidden to engage in illegal operations in the name of ride-hailing.

Cai Tuanjie, deputy director of the Department of Transportation Services of the Ministry of Transport, said in an interview with CCTV that, unlike online car-hailing, private passenger car sharing, also known as carpooling or ride-hailing, is the ride-sharing service provider who releases travel information in advance. People who travel on the same route choose to take the shared travel mode of ride-sharing service providers, share part of the travel cost, or free mutual assistance. The legal private car sharing referred to here should have two core requirements: one is to satisfy the owner's own travel needs; the other is to share part of the travel cost or free mutual assistance. However, the ride-hailing business launched by some platform companies at that time added too many social functions, which deviated from the original intention of providing travel services. Even some platform companies operated illegally under the name of ride-hailing, which presented huge security risks.

P2P Ridesharing, (as we know as Hitchhiking) was once Didi's most profitable business. Before Didi Shunfeng went off the assembly line, the average daily order volume was about 2 million, accounting for only 8% of Didi's total order volume, but it created a profit of 800 million yuan for Didi.

Didi was offline. At the same time, Gothe and Haro came in, the industry changed, and the story of Tick's counterattack was most often told. There is a voice that the opponent's business has been suspended, and Tick only took advantage.

In this regard, Li Jinlong, the co-founder of Dida Travel, stated that the “false riders” that were illegally operated in the name of a rider were taken offline, and insisted on the "True riders" stipulated in the "Guobanfa 2016 [No. 58] Document" "There will be room for development. "It cannot be denied that Tick is lucky, but it is more because Tick has always adhered to the concept of'True Shunfeng', and constantly restrained itself in the process of development, and did not open the gate to illegal operations in the name of a rider because of the pursuit of short-term benefits. Release the water."

For example, Dida said that the current price of downwind rides on the platform is based on a one-off price related to kilometers, and there are no additional costs related to operations, such as long-distance charges, night charges, and congestion charges. It is understood that the overall level is equivalent to 50% of the pricing of professionally operated vehicles in the same city. This pricing can offset the basic travel costs including oil prices, tolls, and some parking fees. That is to say, if labor costs are included, this pricing, There is no possibility for the owners of illegally operating vehicles to make a profit, and black cars are naturally excluded.

There are two sets of data that may be verified from the side. In March 2018, Dida announced that the average daily order volume of the owners of Shunfeng on the platform was 1.3 orders. According to the data released by Tida Travel a few days ago, nearly 50% of registered car owners on the platform have not been certified.

Li Yi, director of Beijing Huayun Law Firm, analyzed Shenzhen Ran Finance Finance. Whether extreme incidents occurred on a Shunfeng car platform still depends on whether the platform focuses on safety work or the pursuit of order volume and market share. According to her own experience, the ideas between platforms are different. For example, a car owner can register multiple models on certain platforms, which can be a ride, an express or a special car.

The Real Challenges faced by P2P Ridesharing

It was not until November 2019, 446 days after offline, that Didi restarted its ride-hailing business. When the public's vision once again focused on this industry, it was discovered that the structure of this industry has changed, but after a ride in the dark period, problems still exist.

Many industry analysts believe that how to find the right balance between service security and experience optimization is a topic that the platform must overcome. However, more than one person in the legal profession and industry insiders told Shenzhen Burns Finance that the two are not in a balanced relationship. Security is the prerequisite. You cannot lower the requirements for security just because you want user experience. The two should be in a sequential relationship. On the basis of security, the user experience is optimized through services or technology.

Fang Li, a senior partner of Shanghai Kingsway Law Firm, looked at this issue from the perspective of a legal person, saying that if operations are not regulated, there will be certain security risks in the original taxi industry or the emerging online car-hailing travel scene.

Fang Li is also a senior rider passenger. Her feeling is that compared to other travel scenarios, the probability of a safety incident in a real rider ride is very small.

"The Shunfengche platform is promoting the standardization of industry development. For example, Dida participated in the launch of the Shunfengche industry standard brainstorming meeting, the Shunfengche user committee, and the Shunfengche law and standardization committee. Although there are indeed inconsistencies in laws and regulations and supervision in various regions. However, the local supervision is generally aimed at cracking down on illegal operations, and most of them support Zhenshunfeng." Shen Lijun said that this is not just a problem of the market itself. I hope that the entire industry has a clearer understanding of Shunfeng. Later, the management can be further regulated.

Fang Li has been calling for clarification of the regulatory authorities of the ride-hailing industry, hoping to promote the introduction of corresponding group standards and industry standards.

"Can owners who are banned on one platform be banned on other platforms as well?" Shunfeng owner Lu Yang suggested that the platform should share the blacklist of downwind owners.

Li Yi cited a type of case that actually occurred in a traffic accident lawsuit. It was also a ride-hailing. An insurance company used a private car to change the use of the vehicle. This is a ground for breach of contract and will not be compensated. Some local courts will support it, but the Beijing, Shanghai and Guangzhou courts will Distinguish between ride-hailing and online car-hailing, and if it is determined that the former has not changed its usage, insurance companies still have to settle claims.

The prospect of this market is still huge, which is the consensus of many people in the industry. However, more than one person in the industry analyzed SZ Finance, and so far, the industry is still in the preliminary stage of development.

According to data from iiMedia Consulting, it is estimated that by 2020, the number of Chinese Shunfeng users will reach 249 million. The demand for Chinese Shunfeng cars has long existed and is showing an increasing trend. According to statistics from the Ministry of Public Security, as of the end of 2019, the number of private cars in China was about 207 million. At least 60% of the vehicles will be on the road every day. On average, 3.5 seats per car are empty. Two round trips means every day. There are still 700 million empty seats running on the road. In the future, it will double to 1.4 billion seats, and triple to 2.1 billion seats. Even if only 1% of the 700 million seats are shared, there will be 7 million seats.

Li Yi has always been optimistic about the ride-hailing industry. According to her observations, Singapore, the United States, and Europe have established fast lanes in order to solve the problem of excessive vehicle vacancy rates. Vehicles carrying two or more people can take the fast lanes. Otherwise, You can only take the slow lane. In the United States, there is even an extreme situation. In order to take the fast lane, many rich people will tip the passersby in the vehicle.

According to Song Zhongjie, CEO of Dida Travel, the development of China Shunfeng has just started, and there is still a huge blue ocean to be developed, whether it is the owner or passenger end. Dida Travel hopes to take a few years to increase the proportion of private cars on the road opening up to the service to about 20%.