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Transportation Businesses China The Almighty Buck

China Criticizes Subsidized Ride-Hailing Apps As Anti-Competitive (thestack.com) 75

Posted by timothy from the interesting-source dept.
An anonymous reader writes: China's minister of transport Yang Chuantang has warned that the current round of ferocious price-wars among China's leading ride-sharing app providers, including Didi Dache and Uber, represents an attempt to kill local competition with massively-subsidized price cuts that will not subsequently be sustained. Chuantang, speaking at the annual national assembly in Beijing, said that the subsidies "are aimed at occupying more market share within the short term and is competitively unfair for the taxi industry. It is unhealthy and cannot be sustained in the long term." Uber is currently investing (or, arguably, losing) $1 billion a year in its attempts to consolidate a place in the Chinese ride-sharing market.
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China Criticizes Subsidized Ride-Hailing Apps As Anti-Competitive More

China Criticizes Subsidized Ride-Hailing Apps As Anti-Competitive

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  • China needs to block those companies. And the west needs to block much of Chinese imports since much of it is subsidized and dumped on the west as well.
  • Nearly every major industry in the Chinese economy has been subsidized by the government, esp those related to exports.

    • Re: (Score:2)

      by AmiMoJo ( 196126 )

      Nearly every major industry in the US has been subsidized by the government too. Oil, gas, automobiles, software, farming, research, education, construction, mining, space...

      • Yes but the US government isn't the one claiming that ride-sharing services are anti-competitive. Some municipal governments say that they're too competitive but that's another can of worms.
      • Always inserting yourselves into the goddamned conversation! It's not always about you! Here we are, having a nice talk about a topic that doesn't include America, and bang. Some American jumps in and changes the fucking subject to her favorite topic. Stop, stop, stop, just STOP. IT'S NOT ABOUT YOU

      • Re: (Score:2)

        by KGIII ( 973947 )

        Define subsidizing and then show how it is different in any other country for 7 out of 10 of your claims. (The government purchasing something for its own needs is not subsidizing.)

  • Funny how that works (Score:1)

    by Anonymous Coward

    You'd think China of all countries could appreciate a masterful application of dumping [latimes.com] when they see it.

  • Uber is just an app. If they want to pay Chinese drivers more than they charge Chinese customers, to get marketshare -- why not let them? If they raise their prices, people can switch to another app. The other app could be briefly subsidized as well, if needed.

    • why not let them? If they raise their prices, people can switch to another app.

      Because that's not going to happen. It's called network effects, and it prevents competitors from rising up.

      It's the same reason Microsoft had no competitors in the consumer space until smartphones. All devs wrote for Windows because all customers were there, and all customers were there because all devs wrote for Windows.

      Similarly, who would drive for [NotUber], all the customers use Uber. And who would use [NotUber], it has

      • But there should hardly be any network effects. Switching to the competition requires one button click. Drivers can drive for both Uber and not-Uber at the same time. An app could be made to have them bid on multiple driving apps, based on either time or price or both. In comparison, the Microsoft lock-in consists of millions of developer-hours dedicated to Microsoft systems, and similarly with employee training. The Facebook lock-in consists of having one place for all your friends, plus all the stuff you

        • 1, large cost to switch the install base. There is a very large cost to switching large groups of people at the same time.

          2, Uber will not let a single app control both Uber and not-Uber

          I hope that's clear, I'm in a hurry. Can expand later if it's not.

    • Comment removed based on user account deletion
  • ...They sure are Capitalistic.
    • Indeed, they are a Communist party that has taken the capitalist road to achieve socialism. This is a heresy, and Mao warned against it repeatedly. He imprisoned right-wingers and frequently had them either worked or tortured to death as an example to others. It lasted as long as he lived. After he died that rat-bastard Deng Xiaoping hijacked the people's revolution onto the capitalist road, and China has been fucked ever since.

  • This is exactly the problem (at least one big problem) with modern VC driven economics. The investors only care about knocking out the other competitors, not building a long term sustainable business. They monopolize one 'vertical' then move on to wrecking the next one. Amazon benefitted from a similar strategy. They want to burn money blowing out the whole 'ecosystem' of services that are at least priced high enough to keep operating. Obviously this has happened in plenty of other sectors of China's econom

    • Aren't they as a society better off encouraging ride sharing rather than private ownership of automobiles? In big cities with public transportation, private automobiles take up a huge amount of storage space and other resources, without directly contributing to productivity. In rural environments, private vehicles make a lot more sense.
      • A society is better off having as many people as possible who can comfortably afford food and shelter. If you can accomplish that and still support ride sharing, then yes the society is better off. If not, I'll take vehicle ownership any day. To accomplish that, you need as many sustainable industries as possible.
  • Let me get this straight. This is the same country whose subsided the steel industry, the semiconductor industry, then the solar panel industry to drive the prices down and push all their competitors out of business suddenly getting butt hurt when the same tactics are used against them?

    Wow, that's rich. Sorry, not sorry I don't feel bad for them. I hope they learn from this and realize what a shitty tactic it is to engage in and change.
    • The US subsidizes its large industries and cries about it when the same tactics are used against them.
      • It does? The Federal Government outright owns major chunks of the large industries, exempts them from nearly all regulations, and prevents any others to enter the market via refusing to issue business licenses?
        • The person I replied said 'subsidize' and so I used the word 'subsidize'. So let's talk about subsidization: https://www.washingtonpost.com... [washingtonpost.com]

          Also, your federal government is owned in large part by corporations and yes they are winning many exemptions from regulations and preventing newcomers from entering the market. Hell, a large segment of your own people VOTE to make them exempt from regulations and to allow them to prevent newcomers from entering the market.

  • Chinese taxi drivers, before ride-sharing, were horrible. They wouldn't stop, didn't want to work during certain times of day - rush hour, of course - charged extra to go anywhere, doubled and tripled up on customers so you'd have to visit several locations before you got to your destination, you name it they did it. The cabs were filthy, the seat belts didn't work (or were dirty and left a stripe on your nice clean clothes), the A/C didn't work, they wouldn't roll up the windows even in the dead of winte

    • Re: (Score:1)

      by Anonymous Coward

      Smells a little like bullshit. I didn't have that experience during the 5 years I was in Beijing and the 3 years I've been in Shenzhen. The only time they would switch off the clock, pull their ID plaque, and overcharge was if you took a taxi waiting outside a club in the Sanlitun area. In that instance, they become like the HeiChe (black taxi) drivers that camp outside the subway stations. Never had a taxi driver stop to pick up another passenger, ever. The ride sharing is hit or miss. Some of them a

  • While I generally like to see competition to keep people honest (as opposed to corporate conspiracies), a company coming in at below price points to kill competition is certainly not in the best interest of it's citizens, and after the "war" is over companies that have monopolies jack up their prices to "recover" costs well after they truly are. And in truth, it's not entirely easy to blame them as greedy people who blindly support such short term price cuts without taking into consideration the big picture
  • Comment removed based on user account deletion

    • Came here JUST to post this. My kingdom for a mod point.

      • Re: (Score:2)

        by KGIII ( 973947 )

        You'd give up your kingdom for a mod point? Either ethereal e-penis has increased in value or the value of kingdoms has decreased significantly! No wonder nobody has kingdoms any more, they're trading them away for pennies on the dollar!

        I'll give you my whole account, in fine standing, for a kingdom! Hell, I'll make you a second and third one if you happen to have more kingdoms. A single person has got to be worth more than a mod point! (I can't say for certain, I've never tried to buy a person.)

        I do recall

        • I actually do have land... and a pony. They're not all they're cracked up to be, however, hence the excellent asking price. Have you ever seen a 900 pound animal that could get down on all four knees to shimmy under a chain blocking a door? I have. I have seen these things. I wish I hadn't. Little prick.

          • Re: (Score:2)

            by KGIII ( 973947 )

            I've seen a pony that would sit like a dog and ate pork chops. I've seen a miniature horse (which is not a pony) and bet on them when they were pulling sulkies - I was at an OTB facility. I'm not sure I want your pony. I guess, I'll just take the land and you can keep the pony.

        • I used to have a copy... like many of Brooks works, I found it more fun to talk about than to read. Mod points would indeed be worth more than the novel, if not the kingdom.

          • Re: (Score:2)

            by KGIII ( 973947 )

            I do recall liking one of his series but I don't, for the life of me, recollect which it was - nor do I have energy to look. I'm assuming that I have it somewhere still but I've no idea where - it may be on a shelf or it may still be packed in a box somewhere. I don't remember being impressed with it and I do remember being a bit surprised that it was turned into a series - the book I read didn't really feel like the start of a series.

            I was reading another series at the time. My memory is terrible but the n

  • In 99.9% of the cases (ok number pulled out of my !@#$) there is no ride sharing going on. The drivers are actively seeking passengers to take to the passengers destination. They aren't sharing their ride they are hiring out their services.

  • You should be careful to distinguish that anti-competitive behavior (at least in the US) is the creation of barriers to entry by those in the market already. For example, punishing price discounting by incumbent companies to keep new entrants from gaining market share.

    Use of punishing price discounts by new entrants is not anti-competitive, it is actually more competitive.

    Not that politicians don't misuse it just the same of course...

  • And if there's anybody that knows all about artificially lowering prices in order to destroy the competition and have the market to itself, it would be China.

  • "...subsidies "are aimed at occupying more market share within the short term and is competitively unfair for the taxi industry"

    But it's okay when The Chinese decide to subsidize Chinese industries to give that same unfairness against non-Chinese Industry:
    http://www.bloomberg.com/news/... [bloomberg.com]
    http://www.economist.com/news/... [economist.com]

  • China Criticizes Subsidized Ride-Hailing Apps As Anti-Competitive

    Ah, this sounds like music to my ears!

    Play it again, Sam! :-)

  • At least when there are deals, it's cheaper to get a ride in what's often a nice, shiny luxury sedan than a worn-down, stinky taxi.

    So what if Uber gets the whole market? The instant their prices go above what's competitive, someone will spend a few hundred thousand bucks to start a cheaper service. People here can be kind of stingy, which seems to be what Uber is banking on.

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