Report: China’s internet app use decline , didi driver daily online time reduced by 23%

China’s use of app-based car-hailing is falling and slowing car sales in China as operators cut incentives for drivers, research firm Sanford C. Bernstein said. In the third quarter of this year, total daily active usage of China’s online app applications fell 6.3 per cent year-on-year, the fifth consecutive quarter of decline, Bernstein said, citing data from TalkingData, a China mobile data service. The report showed that didi Chuxing, which accounted for 93% of active users in the past 12 months, had a 5% and 23% drop in passenger and driver-side app usage, respectively.

Report: China's internet app use decline drip driverdaily life reduced by 23%

“Driver density is a key determinant of user wait times and perceived ease of service,” Bernstein analysts, including Robin Zhu, said in a report. The simplest explanation for the decline in driver usage is that the network platform pays fewer incentives, and drivers earn less once costs such as fuel, maintenance and vehicle depreciation are deducted. “

The report specifically mentions Didi Chuxing, the world’s largest provider of digital calling services. Didi Chuxing lost about Rmb11bn ($1.6bn) last year, which the company blamed on driver incentives. “What impact does dripping efforts to reduce the number of drivers have on the number of drivers?” mr Bernstein said in the report. Will the taxi industry be ‘disrupted’ by reduced cheap capital until ‘disruptive’ car ownership? “

The report concludes that, given the challenges that operators face in providing services, including safety and comfort, it is not, in fact, easy to make money from online car services. In addition, in response to falling sales, carmakers may also step up their electric-car-calling services to help boost sales and meet quotas for electric vehicles.

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