(Chinese Version)

Editor’s Note:

Coincidently, I was actually sitting in a car hailed via Didi when editing this article. After reading the article, I felt so worried about the future of Didi and other similar car-hailing apps. Nobody shall disregard the convenience brought about by the mobile Internet. However, speculators are everywhere to make profit out of the mobile Internet services. The other days, it was reported that some restaurant owners would pretend to be consumers and add favorable comments on the homepage of their restaurants on MeiTuan. Similar strategies were also adopted by some drivers: they would pretend to be passengers, make fake requests so as to meet the basic standard for huge sum of subsidies. Some drivers even had their own team to work on this. For them, car-hailing apps were no longer car-hailing apps, but rather finance apps, through which they could make a fortune. However, when we looked back at the history of any industry, we might find such behaviors were quite common. The following is an in-depth investigation on this very issue done by our journalist Sun Pin.

In suburban areas of Beijing, you won’t be able to see unlicensed taxis anymore, so you will have to wait on the roadside and pray that the next taxi driving your way will be available, just as you did a few years ago when there were no unlicensed taxis then either. However, unlicensed taxis are only disappearing on the roads. Drivers are continuing to make money, though by cheating on Didi and Uber, not by picking up real passengers and get them to their destinations, since they have found a job where they can stay at home and earn much more money than before.

An insider told me that on average an unlicensed taxi driver could earn over 10,000 RMB per month now. Before May, when Uber gave its drivers 60 RMB subsidy for each order, a driver could earn up to 20,000 to 50,000 RMB. However, some drivers were still not satisfied, so they got into groups and cheated on their requests record and earn even more. My source also showed me some photos and videos they shot in secret in such groups. In these photos and videos, we can see clearly how they cheat exactly. Generally, such groups would have tens of smart phones, computers, and every driver was supposed to use several smart phones at the same time to fake as many requests as possible.

Taobao makes it a lot easier to make fake requests. In a shop on Taobao, these drivers can buy refitted iPhone5Cs, so that they can make fake requests by themselves.

And this is how they do the trick:

First of all, a driver should buy a refitted iPhone5C at 2,280 RMB, so that the driver can pretend to be passengers and make cab requests with different accounts.

Secondly, the driver should buy another iPhone5C at 2,400 RMB, so that he or she can pretend to be different drivers.

By the way, the shop owner is so considerate that he can even help refit drivers’ old iPhones at the price of 1000.

Moreover, this shop, based in Hangzhou, also sells refitted version of the Uber app, and provides after-sale services. Local drivers can receive the refitted iPhone5Cs directly sent by the shop owners, while customers in other cities can receive their refitted phones by express. Why iPhone5C?  The shop owners choose iPhone5Cs to do this because iPhone’s system is closed and safer, which means it’s harder for Didi and Uber to detect their sneaky activities.

The evolution of different cheating methods

Mr. Wu is a driver for Didi Zhuanche, Didi’s honorable VIP car-hailing service. At around 2 am, his phone rang and suggested that a passenger was looking for a car to pick him or her up from Beijing International Airport Terminal 3 to a place called “The king orders me to patrol the mountains”, a famous line from the novel The Journey to the West.

Since there was no such a place, Mr. Wu immediately realized that it must be some driver making fake requests. No driver would bother to receive such requests, since these requests were supposed to be received exactly by the driver who sent them himself.

After some research, I found that Didi Zhuanche’s drivers make fake requests basically for two reasons:

Some drivers make fake requests to meet the bottom transaction volume per month, around 4200 RMB. If the driver failed to meet this bottom line, then he or she will earn nothing this month. Instead, Didi will punish the driver by deducting money from the driver’s account. That’s one reason why many drivers make fake requests before the deadline.

Other drivers make fake requests to get the subsidy. Before June, Didi Zhuanche’s drivers will be awarded 500 RMB if the transaction volume reached 6,000 RMB per month. Now the subsidy will be granted only when monthly transaction volume hit 6,200 RMB.

Since Didi cares only about the drivers’ transaction volumes, even if passengers didn’t pay the bill, drivers get to cheat simply by owning several cheap phone cards. For example, a driver can pretend to be a passenger and make a cab request from downtown Beijing to suburban Beijing, and receive the order by himself, adding several hundred RMB to his transaction volume.

Anyhow, these drivers were in some sense, forced to make fake requests, whether to meet the bottom transaction volume, or to get the subsidy. Still other drivers, however, make fake requests so that they can stay at home and earn money. For them, Didi is no longer a car-hailing app, but rather finance apps, through which they could make a fortune without having to do much.

Recently, Didi rolled out a carpool service dubbed DiDi Shunfengche, good news for both drivers and passengers.

While passengers can get a voucher of at most 7 RMB and use 8 vouchers per day, drivers get to be subsidized a lot. This could be a great opportunity for some drivers to make a fortune. For example, a driver can pretend to be passengers and make cab requests. As a passenger, he is supposed to pay 10 RMB for this ride. Suppose he can use a voucher of 7 RMB, then he only needs to pay 3 RMB for the ride. As for the driver, he can receive a subsidy of 10 RMB. In this case, his net profit is 7 RMB per order. On Mondays and Fridays, when a driver can receive a subsidy of 21 RMB, he can receive a subsidy of at most 168 RMB in total if he made fake requests for 8 times a day.

Didi Shunfengche’s “generous” subsidy policy is typical in the price battle between Didi and other car-hailing apps, where every player is competing to attract more users with much more subsidies.

For example, since Didi Kuaiche (Didi’s public car service)’s subsidies are too high, some Didi Zhuanche’s drivers complain that their businesses are affected by it a lot. Before July 26th, a Didi Kuaiche driver will be rewarded 2,000 RMB if he completed more than 100 orders a week. Moreover, he can keep all the money he made. In this case, a Didi Kuaiche’s driver can earn 8,000 to 10,000 RMB per month.

However, it’s pretty hard to complete 15 orders a day and 100 orders a week. That’s why many drivers turn to Didi Shunfengche to fake their orders, because their subsidy is measured by how many orders they completed, regardless of how far the ride could be.

Uber, Didi’s biggest competitor, rolled out another subsidy policy during rush hours to compete with Didi. As is put by the slogan of the shop I mentioned earlier on Taobao, “We can help you get as many subsidies as possible during rush hours via Uber.”

This shop helps drivers install a modified Uber’s app, so that drivers get to make fake requests and receive their own requests.

Since Uber gives away subsidies based on the number of orders a driver completed, a driver can receive a subsidy of 80 RMB during the rush hour in the morning (07:00-10:00), 65 RMB during the rush hour in the afternoon (17:00-20:00) and 70 RMB during Saturday and Sunday evenings (18:00-22:00).

Different from Didi, Uber distributes cab requests to drivers through its own algorithm. To tackle this problem, these drivers will keep making and withdrawing requests until they got their own requests. These drivers gradually find that Uber tends to distribute new requests to drivers within 1 to 2 kilometers away from passengers, and they tend to receive their own requests outside the 5th ring.

According to my research, four ways to make fake requests gradually emerged:

At the beginning, drivers made fake requests by allying with their previous passengers to make fake requests, so that both drivers and passengers benefitted.

Later on, these drivers and passengers teamed up in WeChat Groups, so that more passengers get to help make fake requests, among which some even become professionals.

Then, faking technologies were developed, so that a driver can operate several phones at the same time and fake even more requests.

At last, some wealthy drivers bought thousands of phones and SIM cards and could make thousands of fake requests in a second, so that other drivers could turn to them for help and benefit each other.

The same thing happened previously in the stock market. Since farmers in remote villages don’t need ID cards in their lives, some speculators bought these ID cards at a low price, opened accounts in the stock market and made huge fortune. Today, drivers get to make fake requests, whether with SIM cards or iPhones, and then make great fortune. What a coincidence.

Design flaw

Although Didi and Uber have always been developing addressing technologies, these drivers are always able to find ways to work around it.

No product is perfect when first developed, thus in-time adjustment and improvement is crucial to its future development. It is almost predestined that drivers get to make fake requests and receive subsidies on Didi, because:

Didi Zhuanche give a settled number of subsidies based merely on transaction volume, no matter passengers pay the bill or not

While Didi Kuaiche awards drivers who completed over 100 orders a week, Uber awards drivers 65 to 80 RMB if they receive requests during rush hours. Both of them give subsidies based on the number of orders a driver completed and fail take distance into consideration.

What’s the way out for Didi and Uber? Even if they take the ride distance into consideration and give awards on different standards, the inconvenient truth is that as long as there are subsidies, drivers will always be able to do some trick and make profit out of it.

[The article is published and edited with authorization from the author @Sun Pin, please note source and hyperlink when reproduce.]

Translated by Levin Feng (Senior Translator at ECHO), working for TMTpost.