Due to the fact that Airbnb, Uber, Lifty and other kinds
of sharing economy are flourishing all around the world, it is time for us to
admit that everything is about sharing, which has already gone beyond
information sharing to sharing physical resources.
After starting its business in Shanghai in 2013, the American rideshare
company Uber has continued to develop its services in seven cities in Mainland
China, from Beijing, Tianjin, Guangzhou to Chengdu and Hangzhou. So, is Uber
as well as the business model going to succeed in China, where people were quite
used to sharing stuff ?
It is undoubted
that Chinese people have seen the value proposition of the company and the obvious
benefits of sharing a car. The most important benefit is it is cheaper than
taxis. For ordinary people, it is an efficient
way to make money by taking advantage of the underused vehicles. Meanwhile, the
service of Uber provides people a chance to meet and talk with others, which helps
to establish closer relationships and easily reach the local life. Besides, in
comparison with traditional taxi services, Uber offers customers different
facilities at different prices. In China, the company has divided their
services into two kinds: People’s Uber, which recruits individuals with
their private cars and Uber Black, which cooperates with car rental companies
to provide high-end cars and service.
The biggest competitors that Uber needs to concern about
may be domestic applications like Didi Taxi. In my view, it is not necessary
that Uber will lose in the battle as long as it keeps its uniqueness. Compared
to Uber, the most significant advantage of DiDi Taxi is that they provide
subsidy to the customers. They promote their service by encouraging people to
grab red envelopes on social platform Wechat. Therefore, it is much more well
known than Uber in mainland china. However, athough Uber and Didi Taxi are both
challenging the traditional industry, they provide distinct services to the
customers. The biggest difference lies in the fact that Uber’s cars are private
vehicles. Meanwhile, as some users suggest, the using experience of Uber is far
more superior than that of Didi taxi. With better navigating and operating
surface, the system of Uber will match people with the most near-by driver
automatically, so that the passenger can catch a ride conveniently and
efficiently. Moreover, because the GPS will record the driving circuit, the
customers can make complains about the driver and get their money back once
they find him taking a detour.
However, as a P2P application, Uber is faced with several
obstacles and challenges if it wants to develop in China.
The first challenge is to build up trust-worthy relationship between
drivers and passengers. Mutual trust is the corner stone of sharing economy,
but it is becoming more and more scarce in
Mainland China. While some Chinese find strangers reliable, the others do
concern about their personal and property safety. As
has been reported, a
driver in New Delhi’s was accused of raping a female passenger, which led to
the result that the local transport department decided to ban Uber. It is the
same situation in China. The developing process would be tough if Uber cannot
find and effective way to guarantee the providers’ and the consumers’
interests.
Another serious challenge that Uber is faced with is the government
policy. In fact, Uber has
been endangered in many cities around the world due to several problems. In
many European countries such as Poland, Uber is faced with heavy penalty
because according to the law, unlicensed drivers should not get payment;
Recently, Nevada has also banned Uber for that it is not under strict
supervision and that the drivers do not pay for insurance. In China, unlicensed
individuals who use private cars to make money are against the law. That is why
Uber choose to mutate and cooperate with car rental companies to provide
high-end services. Although the local government still holds ambiguous
attitudes towards the services of ‘People’s Uber’, it is sure that they will
not let the unlicensed service flourish freely for a long time.
Moreover, if the taxi
drivers can be considered as the existing competitors of Uber, they might be
the last ones who are delighted with the rising of car sharing and the first
ones to backlash against the new comer. In other cities around the world, taxi
association accuses Uber for challenging their business and bringing unfair
competition to the existing taxi industry. When it comes to China, I believe
Uber is going to meet the same or even fiercer backlash. In many cities of
China, people who find the taxi drives enthusiastic, conversable and
knowledgeable may also choose them as the ‘windows’ to understanding local
life.
It is seen that Uber has put so much effort in localizing
their services in China. One of the evidences is that they include Alipay in
the payment methods. At the last Spring Festival, the customers could even ask
for dragon and lion dance performance from Uber. However, the most crucial task
for Uber in current phase is to promote their services in China. With limited
drivers and user scale, it is hard for Uber to exploit the advantages to the
full. In china, the incentive mechanism of Uber is that once the user
recommends the service to another person, he can get 50RMB. However, many
people find it difficult to help promote Uber since it is really hard for
people to change their old habits and immediately embrace new things.
Therefore, we can only say that once Uber finds the effective way to reduce the
cost of developing new users, the company may starts to grow as a successful
player in China.
Reference:
1.
The Economist.
(2014) The sharing economy: boom and
backlash. Retrieved Dec 10, 2014 from http://www.economist.com/news/business/21601254-consumers-and-investors-are-delighted-startups-offering-spare-rooms-or-rides-across-town
2.
腾讯科技.
(2014) Uber终于正式进入北京了，但挑战并不少. Retrieved Dec 10, 2014 from http://tech.qq.com/a/20140714/055439.htm
3.
Time.
(2014) 5 places where Uber is fighting for its life right now. Retrieved Dec
10, 2014 from http://time.com/3623241/uber-battles/
4.
Fortune.
(2014) Backlash against Uber spreads from Chicago to Mumbai. Retrieved Dec 10,
2014 from http://fortune.com/2014/12/10/backlash-against-uber-spreads-from-thailand-to-oregon/
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