On Wednesday, Chinese ride-hailing giant Didi Chuxing announced its plans for corporate restructuring 2017 in a letter to employees. Among them: the creation of a new “future transit team” tasked with futurizing transportation in China’s cities.
Specifically, the letter says that the team will “work with local governments to create smart transportation systems” and improve citywide transportation efficiency through the use of big data. The team will be headed by senior VP Zhang Wensong, and existing public transit projects like Didi’s bus services will now operate under the auspices of the FT team.
Didi also established a new international business team as part of the restructuring.
The establishment of a new, high-level team dedicated to working with local governments at this moment is likely not a coincidence. Didi may have defeated Uber China, but it has been struggling with government relations in the wake of bans on out-of-town drivers in many of its major markets. A significant percentage of Didi’s major-market drivers are out-of-towners; in many markets those drivers have been forced to find new employment (or continue their work illegally, risking police fines and the impounding of their car).
The rules have also made life more difficult for Didi’s passengers, who are finding it harder to book rides, and paying significantly higher fares when they do find them because drivers are increasingly scarce (and because Didi no longer has any major competitors). There’s no doubt some consumers are frustrated with the service. For example: the most popular user comment on a Sina Tech story about Didi’s restructuring as of this writing is this:
No matter how you restructure garbage, it’s still garbage.
The top comments on other Chinese news platforms aren’t any nicer.
The newly-established FT team isn’t specifically tasked with lobbying local governments about the new ride-hailing rules, but it’s possible Didi is hoping to offer authorities a kind of quid pro quo: we’ll help you ease traffic congestion and public transit efficiency in the hopes that in return you’ll ease restrictions on our drivers. It’s probably also looking to increase its involvement in public transportation systems as a way of hedging its bets.
This is an opinion piece.
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