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Unhappy drivers share concerns over market monopoly

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2016-08-03 11:05CCTV Editor: Feng Shuang

Concerns have been raised that Didi and Uber could monopolize China's ride-hailing market following the announcement on Monday that the two plans to merge their China operations. Didi representatives say their will be no anti-monopoly investigations since neither of the companies' operation in China are profitable. However, China's Ministry of Commerce has not ruled out the possibility of an anti-monopoly investigation being launched.

"The Ministry of Commerce hasn't received any files from Didi and Uber yet. According to the regulation and anti-trust law, companies need to declare such deals to the Ministry of Commerce. Those who don't declare could not conduct such deals," said Shen Danyang, Commerce Ministry spokesman.

Whatever the official status of the deal, drivers from both sides have started to worry about possible subsidy cutbacks.

Just days after China legalised online ride-hailing services, DiDi and Uber announced their merger. Taxi drivers like Gao Fujun are the first ones to feel the pinch. They used to be on the top of the industry food chain, but have seen business decrease ever since the emergence of ride-hailing apps.

"I used to have about 20 transactions each day, ever since these ride-hailing apps came out, I only have about 15 businesses daily, even if I use Didi Chuxing," said Gao Fujun, taxi driver, Beijing Beiqi Taxi Group.

He thinks Didi's acquisition of Uber China won't help reduce competition among different types of drivers in this market.

"Our working hours are longer now, but our income is not as high as before. The merger of the two apps won't benefit us, and pressure from competition is always there," Gao said.

However, the deal does seem to eliminate cut-throat competition between Didi and Uber China. Didi reportedly made a 2-billion-dollar loss last year, while Uber saw its profit 1 billion dollars in the red.

Driving a Uber car used to be profitable business for part-time drivers aiming to make some quick cash. But now the good times are feared to be over with the rise of a newly created market giant.

"Do you still see BMWs and Mercedes when you order Uber cars? They don't want to do it anymore, because subsidies are too low," one Uber driver said.

"You will only see cars valued under 200,000 yuan, more expensive cars won't use Uber anymore because you don't make profit. "

Beijing's Uber drivers are widely concerned about shrinking subsidies under a dominating single player.

"Why did they burn so much money to compete with other firms? Because Didi wants to become a monopoly. Look at all those smaller firms we had before, they are already driven out of market," a driver said.

So would the Didi Uber deal trigger market monopoly concern?

"I don't think we should worry about monopoly, as we've seen plenty of mega-size deals before Youku Tudou, Didi Kuaidi. They were never challenged for monopoly issues. It's unique about the Chinese market," said Xiaofeng Wang, senior analyst, Forrester.

However, according to business media Caixin, the merger could still face government's anti-monopoly scrutiny, as market shares of Didi and Uber already account for 70 percent and 17 percent respectively.

  

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