Why are there still a large influx of people?, All are persuading to withdraw, driver orders have significantly decreased, and the Shanghai ride hailing market is becoming saturated. Platforms | ride hailing | orders

In May this year, multiple cities including Dongguan, Wenzhou, and Jinan successively issued warnings of online ride hailing saturation, and even suspended the acceptance of new online ride hailing transportation certificates in some cities.

"Business is not doing well now, and there is competition among platforms, ride hailing rental companies, and drivers." Many ride hailing drivers sighed. With the continuous participation of practitioners and the gradual saturation of transportation capacity, the number of orders received by ride hailing drivers in Shanghai has also significantly decreased. The myth of earning tens of thousands of yuan per month is being exposed by reality.

The voice of persuasion has already appeared

Xiao Zhang from Anhui has been driving ride hailing services in Shanghai for three to four years. At the beginning, due to being young and energetic, I ran for more than ten hours every day. I drove around 7 o'clock in the morning and stopped at around 11 o'clock in the evening. I only slept five or six hours a day. Later, my body couldn't bear it anymore, so my working hours were reduced to ten hours.

"Last June, when Shanghai was just lifted from lockdown, there weren't many cars on the road yet, and you could earn around 700 to 800 yuan per day. If it was better, you could earn 1000 yuan. After deducting rental fees, fuel fees, rent, and so on, your monthly income was still decent." Since the beginning of this year, Xiaozhang has clearly felt that there have been fewer orders for ride hailing services. "Even if you work 24 hours a day, you may not necessarily earn 1000 yuan. The market is not as good as some platforms promote, so you need to be cautious when entering the industry."

Master Chen also had a similar feeling, "Why are there so many cars now, I really don't understand." Recently, he drove around Zhuqiao Town for a long time, and due to the large number of cars and few orders, he shifted his "position" several times. A screenshot of a mobile phone at a certain location on that day shows "1 order in the next ten minutes, 73 empty drivers nearby".

Currently, the latest official data on the scale of ride hailing services in Shanghai cannot be found. An industry insider who declined to be named stated that there are over 100000 certified ride hailing drivers in Shanghai, and around 70000 certified vehicles. "There are also many unlicensed vehicles in operation, and it's hard to say the scale," he said

"Nowadays, any car with a Shanghai license plate can join the platform." Driver Lao Cai, who is in his early 40s, had a work-related accident and left a sequelae. After resting for a period of time, he also became an online ride hailing driver.

He told reporters that private cars for ride hailing belong to the bottom layer of the ride hailing dispatch system, and good platform orders will definitely be sent to private cars and rental cars first. Especially when renting a car, drivers have to pay a hefty monthly rental fee. If these people can't keep up, the car won't be able to be rented out. "Nowadays, there are clearly fewer orders. Previously, selling a product at a high price could earn around 400 yuan per day, but now I can make around 200 to 300 yuan per day. Fortunately, the car is my own."

Local ride hailing drivers with complete two certificates may openly accept orders for operation, but some may find it more difficult to do business compared to drivers with incomplete two certificates. "The reason is also very simple. Many drivers from other places, in order to make a living, often spend more than ten hours scrolling around, and their account activity increases. On the other hand, many of our local drivers work from eight in the morning to five in the evening, and when it's time to go home for dinner, they definitely can't compete with others," said driver Lao Zheng.

The myth of monthly income exceeding ten thousand is being exposed

"The job of exchanging life for money" and "it's all about enduring time" are the voices of many ride hailing drivers. However, on the other hand, it is the online promotion of "high income", "high turnover", and "monthly income exceeding ten thousand".

"Some ride hailing companies, in order to gain profits, release false recruitment advertisements and post high traffic screenshots to attract everyone to sign up." Driver Lao Yu told reporters that the threshold for the ride hailing industry is low, as long as you have a car and can drive, you can do it. In addition, some platforms promote high profits, and middle-aged unemployed people and other groups consider it as a guaranteed employment choice. He also saw similar advertisements on the recruitment website in his hometown. After inquiring by phone, he found out that the other party not only provided food and accommodation, but also stated that their monthly salary was between 13000 to 18000 yuan.

The reporter used the recruitment of ride hailing drivers as a key entry and searched for relevant information on a certain recruitment website. The salary in Shanghai is basically between 10000 and 20000 yuan. However, many drivers have expressed that earning over ten thousand yuan per month is not easy to earn, and even some informal enterprises intentionally dig holes for drivers.

Xiaofang talked about his previous experiences. Within 26 days of picking up the car, he drove for a total of 269 hours, showing a turnover of over 10000 yuan. After deducting rental fees, service fees, inspection fees, charging fees, and vehicle damage, he actually received less than 200 yuan that month. "This is completely inconsistent with the car rental company's promise of 'working 10 to 12 hours a day, and the platform guarantees a turnover of 12000 yuan for dispatching orders'. They get up early and dark every day, and have very little left."

"The online promotion of 'daily turnover exceeding a thousand' is partly due to fraud, and partly due to the skills and time spent by experienced drivers. Not everyone can do it, and there are also expenses such as rental fees, rental housing, and fuel and electricity fees that need to be deducted. Some industry insiders have pointed out that some informal rental companies in the market will deduct money and squeeze them for profit when drivers cannot complete their turnover or have to default due to low income.".

Not only that, the competition between platforms has made the online ride hailing industry increasingly crowded, and the first to be affected is the online ride hailing drivers who are at the forefront of the industry.

Previously, Meituan staged a scene of "fast in, fast out" and ultimately gave up self operated taxis. The original self operated drivers on the platform can flexibly choose to join other platforms according to their own situation. In the Shanghai area, most of them choose to travel on Xiangdao and Didi.

In early June, media reported that the Xiangdao Travel Platform had its second price adjustment this year in Hangzhou. In terms of starting fees, the pricing fees for different time periods have been reduced.

"All platforms require high-quality drivers. For some experienced drivers, relying on appointment forms, urgent orders, and 'technology and hard work' may not have a significant impact. However, new drivers who blindly enter the industry with limited order volumes are likely to be disappointed and leave in the end," said Lao Yu.

How to deal with saturated markets?

According to the information exchange system for ride hailing supervision, as of March 31, a total of 307 ride hailing platform companies in China have obtained operating licenses for ride hailing platforms, an increase of 4 compared to the previous month; A total of 5.229 million driver's certificates and 2.25 million vehicle transportation certificates were issued in various regions, with a month on month increase of 1.0% and 2.7%, respectively.

Didi's financial report data also shows that from March 2020 to March 2021, Didi had 13 million annual active drivers in China, while from March 2022 to March 2023, this number increased to 19 million, an increase of 6 million in just two years.

Against the backdrop of saturation in the ride hailing market, many regions have issued risk warnings for the ride hailing industry, and some cities have even pressed the "pause button".

Starting from May 16th, Changsha City will suspend the acceptance of new online ride hailing transportation certificates. Those that have already been accepted will be processed according to normal procedures. Prior to this, multiple cities such as Dongguan, Sanya, Wenzhou, Jinan, and Suining have successively issued saturation warnings for ride hailing services, reminding local ride hailing services that the daily average number of orders received is less than 10.

This is an important indicator to measure whether ride hailing drivers can make money. Based on an average of 10 orders per day and an average price of about 20 yuan per order, if the daily income is less than 200 yuan, it will be unprofitable.

Currently, cities have accelerated the process of standardizing ride hailing services. Guangdong requires all platforms to stop dispatching orders to drivers without "dual certificates" after May 31st. Prior to this, some individuals who have not yet obtained the qualification for ride hailing services can also take orders on the platform. "After the policy is tightened, newcomers who have recently entered the industry may be the first to experience 'pains', such as early return of leased vehicles involving breach of contract and other issues." A driver said.

Yang Guoping, Chairman of Volkswagen Group, suggested strict control over the number of ride hailing services in the city and strengthening the operation and management of rental vehicles for ride hailing services. He stated that from January 2021 to June 2022, Shanghai's new issuance of network ride hailing vehicle operation certificates continued to grow rapidly, with 26118 issued in 18 months, bringing the total number to nearly 60000 vehicles. The total number of taxis in Shanghai has exceeded 110000, exceeding Shanghai's forecast of 88000 taxis by the end of the 14th Five Year Plan period.

He believes that while cracking down on illegal operation of ride hailing services and rectifying related platforms, it is necessary to accelerate the revision of the Shanghai Taxi Management Regulations, plan a reasonable proportion of touring cars and ride hailing services, and create a good market environment for the healthy development of the taxi industry.

At the same time, industry insiders also call for job opportunities such as ride hailing services to provide re employment opportunities for unemployed middle-aged people and other groups. When these industries can no longer accommodate so many people, how to provide them with more reasonable employment and institutional arrangements needs the collective attention of society.