Mo­bi­liz­ing idle hands dur­ing a down­turn

China Daily (Canada) - - FRONT PAGE - By LI XIANG

Car-hail­ing apps are popular in China th­ese days for one ob­vi­ous rea­son: they of­fer daily com­muters pri­vate car ser­vice as an al­ter­na­tive to the crowded public trans­port sys­tem and the taxi ser­vice that is of­ten in short­age

But there is an­other ap­peal­ing as­pect of it: mo­bi­liz­ing the idle hands in so­ci­ety dur­ing the eco­nomic down­turn.

Zheng is a driver I re­cently met while I took a ride home us­ing the car-hail­ing ser­vice. When I asked him how the driv­ing busi­ness had been and why he was do­ing it, he sighed a bit and said: “I am do­ing this as a part-time job. My own busi­ness has gone bad.”

Zheng, 39, is a steel whole­saler. He mi­grated to Bei­jing 20 years ago from a small vil­lage in Sichuan prov­ince to start his own busi­ness. He made some money dur­ing the years when the prop­erty mar­ket boomed.

Nowhis busi­ness has come to a com­plete stand­still be­cause of the tough gov­ern­ment reg­u­la­tions on new­con­struc­tion projects and the de­clin­ing prop­erty mar­ket value, which have led to a sig­nif­i­cant drop in steel de­mand.

Although the driv­ing job did not pay as much as he ex­pected, Zheng ap­peared to be sat­is­fied. He said he could make about 8,000 yuan ($1,300) per month and if he is will­ing to work longer hours on both week­days and week­ends, he can make up to about 12,000 yuan.

“You know, this is much bet­ter than sit­ting at home and do­ing noth­ing. My son is go­ing to col­lege this year, so the ex­tra money re­ally helps make life eas­ier,” he said.

Af­ter talk­ing with Zheng, I be­gan to con­duct sim­i­lar sur­veys on other driv­ers when­ever I used the pri­vate car-hail­ing ser­vice. And I found Zheng was not alone.

Driv­ers I have talked to, rang­ing from a fur­ni­ture store owner, dealer of con­struc­tion equip­ment and even waste re­cy­cler, are mostly self­em­ployed small busi­ness own­ers. They are in the pri­vate driv­ing busi­ness for the same rea­son: their own busi­ness is not do­ing well and they drive to make some ex­tra money to cover daily ex­penses.

Didi Kuaidi, China’s largest tax­i­hail­ing app provider by mar­ket share, claimed that it has 400,000 driv­ers for its pri­vate car ser­vices and the num­ber will ex­ceed 1 mil­lion by the end of the year.

In mega cities like Bei­jing with 21 mil­lion res­i­dents and some 5 mil­lion cars, the num­ber paints a promis­ing fu­ture for the car-hail­ing busi­ness.

The pop­u­lar­ity and suc­cess of com­pa­nies such as Didi Kuaidi and Uber - its ri­val from the United States— are ex­am­ples of the fact that in­no­va­tion and in­for­ma­tion tech­nol­ogy de­serve ap­pre­ci­a­tion as they mo­bi­lize the ex­ist­ing re­sources — both cars and man­power— in the most ef­fec­tive and low-cost way.

But then I be­gan to won­der how long such pop­u­lar­ity could last. Car-hail­ing ser­vice com­pa­nies are burning cash to at­tract clients and to stay ahead of their ri­vals. It is doubt­ful whether such prac­tices are sus­tain­able in the long run, as the mar­ket in­cen­tives would van­ish if the com­pa­nies stop sub­si­diz­ing both driv­ers and users.

The rosy prospect has also been shad­owed by the is­sue of le­gal­ity of car-hail­ing apps, es­pe­cially pri­vate cars. Trans­port au­thor­i­ties in Bei­jing have re­it­er­ated that pri­vate cars of­fer­ing un­li­censed taxi ride vi­o­late reg­u­la­tions.

The gov­ern­ments ap­pear to be hes­i­tant on em­brac­ing the newser­vice as it chal­lenges not only the ex­ist­ing public trans­porta­tion reg­u­la­tions but also the tra­di­tional taxi busi­ness which is mostly con­trolled by State-owned en­ter­prises.

Nonethe­less, peo­ple’s en­thu­si­asm re­mains strong. Driv­ers like Zheng are still will­ing to take the job de­spite the reg­u­la­tion risks.

Some ofmy friends have even given up the idea of buy­ing a car be­cause the pri­vate car ser­vice saves them from park­ing trou­bles and the high ex­penses of car main­te­nance and in­sur­ance.

The bright part is that Shang­hai is likely to be­come the first Chi­nese city to le­gal­ize the car-hail­ing apps as it is al­ready work­ing with the com­pa­nies to in­clude their ser­vices in a gov­ern­ment-spon­sored tax­i­book­ing plat­form. Hopes are that it could lead to a break­through na­tion­wide. Con­tact the writer at lix­i­ang@chi­nadaily.com.cn

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