Shanghai Street View: Reliable Rides
As a high-tech writer, I’ve been chronicling the story of Internet-based car services like Uber and Didi Kuaidi in China for the last 2 years and how they’re shaking up a market that was dominated for decades by stodgy taxi companies. But an experience this past week here in Shanghai made me realize just how revolutionary these services have become, and more broadly how the Internet is shaking up and democratizing many traditional industries.
My moment of insight came during a field trip with some students to the Lujiazui financial district, which has become a standard part of the financial journalism course I teach at a local university. I made the trip as usual trip by subway, and met my students at one of the many high-rise office towers for our tour of a local news agency.
I assumed my students had also made the trip by subway, since that’s the fastest and most affordable way to reach the area from their campus. But when I inquired, I was surprised to learn that most had come via Uber hired cars, which cost them just 6 yuan apiece, after they used a promotional discount and divided the cost between 4 or 5 occupants per car.
The hired car services story in China has been a noisy one, as traditional taxis are facing this sudden new challenge from newcomers like Uber. The new generation of companies uses global positioning technology to offer services that quickly and efficiently link customers with nearby hired private cars.
Such cars are often newer, cleaner and more comfortable than traditional taxis, and their drivers are also more professional and friendly. I’m not a big user of hired car services, but many of my foreign friends have become major fans due to their cheaper prices, along with flexible and friendly service in cars that are usually newer and more comfortable than taxis.
They tell me many drivers of these cars often have other full-time jobs, sometimes even as white-collar office workers, and drive to earn extra money in their spare time. This cheaper, friendlier and more reliable service seems like an easy choice for people who can afford to spend more than 40 or 50 yuan on a single ride. But in my mind it still seemed beyond the reach of average workers and students who would usually chose public transport that is far cheaper.
More Affordable Than Ever
But apparently these newer services have revolutionized the industry so much so that even students now consider them affordable. As a teacher in China for nearly 5 years, I can say with confidence that college and graduate students are some of the most price-sensitive people out there.
Most of mine are extremely careful about how they spend their limited funds, which is why I was so surprised to hear they had taken an Uber car. But then again, 6 yuan does seem quite reasonable when compared with a far less convenient trip by public transport costing just 1 or 2 yuan less.
From a personal perspective, I’m quite excited that these new car services are finally giving traditional taxis the wake-up call they need to improve their performance. Shanghai is one of the best cities in China for taxi service, as most of our drivers are relatively polite and their cars are mostly free of clutter, even if they’re not the most comfortable.
The same is hardly true for even places like Beijing, where it’s nearly impossible to find taxis during peak times and drivers often refuse a ride if they don’t like where you’re going. The situation becomes even worse in smaller cities I’ve visited, where you have to bargain with drivers who sometimes stop to pick up other passengers before they’ve delivered you to your final destination.
All of these drivers act the way they do for a number of reasons, but one of the biggest is that they previously had little or no competition forcing them to behave more professionally. Against that backdrop, it’s no huge surprise that the biggest opponents to these new private car services are the traditional taxis who are finally having to compete with more professional drivers.
Some of these taxis argue the market for hired car services is fixed, and thus having to share with the newer hired car companies dilutes their part of the market. But as the case with my students shows, these newer car services are not only finding business with traditional taxi customers, but are actually creating new business from people who never would have considered hiring a car before. Rather than keep complaining, these taxi drivers should focus on the many advantages they already enjoy, and work just a bit harder to offer up competitive service that can win back consumers from their newer rivals.
