Yidao, China’s Second-Largest Ride-Hailing App, Hits Trouble
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2017-04-11 12:14:26

Less than a year after ride-hailing company Yidao Yongche proudly announced that it had registered more than 1 million drivers, hundreds of these chauffeurs are complaining that they can no longer get paid.

State broadcaster China Central Television reported Monday that many Shanghai-based drivers claimed Yidao owed them between 1,000 and 30,000 yuan ($145 to $4,350). The news closely follows the announcement that Yidao’s founder, Zhou Hang, left the company to join a venture capital fund.

“Apparently, I missed the best time,” said a Yidao chauffeur surnamed Wu who lives and drives in Shanghai. The 48-year-old joined the platform in the summer of 2016 with a rented car. “It used to be easy for drivers to pocket more than 10,000 yuan a month. But nowadays, I make around 7,000 yuan, and I have to work during the night. It’s hard to make money during the day,” he told Sixth Tone.

Yidao Yongche became China’s first ride-hailing company when it launched in October 2010. Competitors launched services in 2014 and 2015, and a fierce battle for market share ensued, with companies burning through investor money in the form of subsidies for both drivers and customers. In October 2015, Yidao Yongche received an investment of $700 million from technology company LeTV — which now appears to be experiencing financial difficulties of its own.

During its heyday in 2016, Yidao announced that it had received more than 1 million orders in a single day. However, after it subsidized customers for nine months, the increase in new users slowed down significantly. The company also started deducting a fifth of each ride fare from driver incomes.

China’s ride-hailing market is now dominated by Didi Chuxing — the result of a merger between rivals Didi Dache and Kuaidi Dache — which has taken over the Chinese operations of American ride-hailing company Uber. According to data from CNIT Research for the third quarter of 2016, Didi held as much as 94.6 percent of the entire Chinese car-hailing market, while Yidao Yongche came second with a mere 3.6 percent. While Didi enjoys a dominant market share, it is not without its problems: Recent regulations in Shanghai, for example, have outlawed out-of-town drivers, drastically diminishing the company’s car fleet in the city.

Drivers for Yidao say they have noticed a drop in customer numbers, but their number-one headache is that they frequently cannot withdraw money from their company accounts.

Yidao drivers can usually transfer the money they’ve earned through the platform to their own bank account between 10 a.m. and 3 p.m. on workdays. However, as early as January this year, Yidao drivers across the country started to report problems in withdrawing money from the company.

“At first, we were told it was a technical problem,” Luo Yixun, a Yidao driver in Shanghai, told Sixth Tone. “But in the past few weeks, there has been no representative from the company addressing our concerns — nobody at the company offices answered our calls.”

When Sixth Tone tried to reach Yidao Yongche on Tuesday, calls to the company’s headquarters in Beijing went unanswered. The CCTV report said that the company’s Shanghai office is currently empty.

Customers have also complained that hailing a ride on Yidao has become more difficult. “It’s almost impossible to get a car if you’ll be traveling only a short distance,” said Li Jun, a Yidao user who has more than 1,000 yuan left in his account. “It’s common to have to wait between 15 and 30 minutes for a car to arrive.” Li added that the fares on the app have significantly increased since 2015. 

Luo has driven for Yidao for three years. But, given the rumblings of financial problems at the company, he said he is considering driving for Didi Chuxing instead.

Additional reporting: Wang Lianzhang; editor: Kevin Schoenmakers.

(Header image: Registered Yidao drivers show transaction details of an unsuccessful cash withdrawal on the company’s app, Shanghai, April 10, 2017. VCG)