Ride-hailing was once considered a business with huge growth prospects. Practitioners and investors believe that enough vehicles will lead to more rides, fewer cars, and ultimately fewer cars. Today is a travel platform. Tomorrow, when people no longer want to own a car, they look forward to being a car operator in the city and get tickets for driverless cars.
In the past ten years, more than 20 to 30 billion US dollars have been invested, and the best answer handed over by the entire industry is 28 million orders per day. Since 2018, the number of online car-hailing orders across the country has not increased significantly, but has stabilized between 20 million orders and 30 million orders per day. There are 1 billion local trips every day in China. According to this calculation, online car-hailing only penetrates 3% of China’s travel market.
It’s true that ride-hailing is a better experience than a taxi, but the industry as a whole failed to solve a fundamental problem – they couldn’t make it cheaper. And they have no way to increase the number of online car-hailing cars indefinitely to adjust the relationship between supply and demand – urban roads determine the upper limit of online car-hailing cars, and the roads in big cities are already congested.
This means that China’s online car-hailing market is currently entering the game of stock, and the participants are pouring everything in, but they are fighting for each other’s territory.
Over the years, Didi has occupied 90% of the market, with hundreds of ride-hailing platforms competing for the remaining 10%. Meituan has launched two attacks and failed to change the pattern.
Until last July, the window period came. Just like a countdown, Gaode Taxi, T3 Travel, and Cao Cao Travel (hereinafter referred to as Gaode, T3, and Cao Cao respectively) all set radical goals. It is understood that at the beginning of 2022, AutoNavi set an annual goal of securing 8 million daily orders and competing for 10 million, striving for a market share of more than 30%; both T3 and Cao Cao plan to win 20% of the market share.
A year later, the market pattern finally changed to 7:3. AutoNavi is the biggest beneficiary, with a more than threefold increase in single volume. At present, the daily order volume of AutoNavi is about 6.5 million orders, and the peak order volume is 7 million orders. It was followed by T3 Travel, Cao Cao Travel, and Meituan Taxi, with daily orders of 2.3 million, 1.2 million, and 1.1 million, respectively.
In this regard, AutoNavi stated that the single volume information was untrue, T3 said that the current daily single volume remained at the peak level of 3 million single orders, and Cao Cao Travel stated that it was inconvenient to respond to operational data.
But they failed to achieve the goals set at the beginning of the year. For obvious reasons, the pace of each has slowed in recent months, and the total number of ride-hailing orders in China in April this year was 37% lower than the same period last year. Gao De originally planned to launch the self-operated online car-hailing “Rocket Travel” in March this year, but it has been postponed twice due to the epidemic and the operation license. Meituan will focus on the four cities of Shanghai, Hangzhou, Nanjing, and Chengdu, hoping to gain a firm foothold in markets with large regional orders, rather than subsidizing expansion. T3 Travel continued to struggle to find financing. In July, the company held an oath-taking meeting at the Nanjing headquarters, and the heads of various regions and cities signed the life and death certificates to make a last-ditch effort. They understand that if this time fails, the national self-operated online car-hailing platform will likely remain the only one for a long time.
The scale of online car-hailing is limited by urban traffic and the consumption level of Chinese people, and the market has not grown for many years. Everyone is penetrating into the sinking market, which has brought some growth, but only a few million orders. The participants did not significantly innovate, nor did they reduce costs on a large scale, allowing ride-hailing to grow into a more efficient business.
A market with weak foundations is like a fight over the sand—the harder it is, the faster it may sink.
Gothe’s key battle
In the online car-hailing market, Meituan has made two attacks. The first time ended with a contraction, because it understood that it could not challenge Didi with the method of Didi, and the second retreat was because within a limited window period, it knew that it could not defeat Gothe with the method of Gothe.
Meituan’s pilot ride-hailing business started in 2017, and it got off to a smooth start. It took a 30% market share a week after entering Shanghai the following year. At the time, Meituan believed that the online car-hailing market would not exhibit an oligopolistic pattern, and it hoped to capture 30% of the national online car-hailing market share.
Due to Meituan’s control over its financial performance and the poor efficiency of taxi-hailing operations after its listing, Meituan’s taxi-hailing model changed from a self-operated model to an aggregation model in 2019 (Meituan provides the entrance, and third-party online car-hailing companies provide taxi-hailing services) , but Meituan is still actively stockpiling online car-hailing qualification certificates in various places, waiting for opportunities.
Last July, the window period came. Meituan acted quickly. Within a month, it launched a direct-sale online car-hailing business in 37 cities across the country. However, after the end of the third quarter of last year, Meituan Taxi once again slowed down the pace of expansion, reduced subsidies, did not open new self-operated cities, and did not promote large subsidies and recruitment of drivers in newly opened cities.
“LatePost” learned that the growth rate of Meituan’s taxis in the past year was only about 400,000 orders, which is not obvious compared with the more than three-fold increase of AutoNavi and the increase of millions of orders on other platforms. As of June this year, Meituan’s daily ride-hailing volume was around 1.1 million, of which the ratio of self-operated to aggregation was about 4:6.
This year, the goal of Meituan’s taxi-hailing business is set at 1.2 million orders this year. There is no requirement for profitability. Meituan’s focus this year is on Shanghai, Hangzhou, Nanjing, and Chengdu. Meituan hopes to accumulate methodologies in the market with a large number of orders in the region. , rather than blindly pursuing growth.
Meituan is good at planning in advance. After the first attack turned to contraction, it continued to reserve a lot of city operation resources, so it could quickly enter various cities when the window period came. At the same time, platform management is strict, with more emphasis on compliance and strong control over small platforms. Meituan Aggregation only accesses 13 medium-scale online car-hailing platforms, including Meituan Self-operated, Shenzhou, Shouqi, Cao Cao, Yuexing, 900 Travel Economy, Hello, Sunshine, Ruqi, Ruyue, Enough Spectrum, Qimiao, and Happy Thousands of Homes, a total of 96 cities have been entered. Meituan also tried to provide SaaS services in 2019, accessing more than 30 local service providers during peak periods. Beginning in March this year, Meituan successively retire small service providers and no longer do SaaS. According to a Meituan person, the reason for withdrawing from SaaS is the poor management ability of small service providers and the high risk probability. Meituan does not want the taxi business to bring additional risks.
However, compared with other market participants, Meituan’s overall strategy is the most cautious, and it did not fully invest nor give up.
The strategic significance of AutoNavi Taxi for AutoNavi business group is higher than that of Meituan Taxi for the entire Meituan. The ability of Gaode taxi to Gaode map can be mutually enhanced.
AutoNavi Map has about 120 million daily active users. When users search for a destination on AutoNavi Map, they are first recommended to take a taxi.
In the early stage, Meituan Taxi attracted Didi firepower. AutoNavi chose a non-threatening aggregation mode to cut in, and cut into self-operated after becoming bigger.
Gaode’s expansion ideas are more flexible. AutoNavi divides the connected car-hailing platforms into “First Ring” and “Second Ring”. ” is 155 small and medium-sized online car-hailing platforms. Through them, AutoNavi was able to enter 300 cities to conduct business. At the same time, capital is used as an aid to enhance control. For example, Alibaba once invested in T3 Travel, and T3 Travel is still reluctant to join Meituan. In addition to T3, Ali has also invested in a number of local small network car-hailing operation platforms.
Externally, AutoNavi has publicly promised many times that it will only do aggregation mode matching resources, and will not end up doing online car-hailing transportation. “Neither a referee nor an athlete.”
All service providers connecting to AutoNavi’s “Second Ring” need to use the SaaS services of Xiamen About Travel or Beijing Bailong Ma Yunxing Technology. The CEO, CTO and several core executives of Bailongma are all from AutoNavi, but AutoNavi has always strongly denied the existence of affiliation with Bailongma, calling it an important partner.
Judging from the industrial and commercial registration information, AutoNavi has no direct equity relationship with the two companies, but many AutoNavi employees who were interviewed by LatePost said that from 2019 to 2021, the White Dragon Horse team was once at AutoNavi headquarters—— Wangjing opened the plaza for the first time and worked with AutoNavi employees. The current Bailongma CEO Yang Wei was originally an employee of AutoNavi P9. CTO Yu Zhijie, R&D director Dong Guangyu, testing director Yao Zhen, and operation director Wang Yue previously worked for AutoNavi.
AutoNavi integrates local online car-hailing service providers such as Bailongma. Bailongma provides them with SaaS services and builds a back-end system. Car rental companies only need to provide vehicles and recruit personnel to access AutoNavi. The advantage of this is that AutoNavi can quickly cover the national market at a low cost, while avoiding regulatory risks such as compliance rates.
In AutoNavi’s “Second Ring”, the four largest platforms are called “Four King Kongs”, which are Duoduo e-Travel, Travel with China, Timely Car, and 365 Trip, providing AutoNavi with more than 1 million yuan per day. single capacity. Beginning in 2020, four companies have successively pledged equity, and the pledgee is Alibaba.
In July last year, AutoNavi adjusted its operation focus from “first ring-second ring-taxi” to “second ring-taxi-first ring”, giving priority to supporting the transportation capacity of “second ring”. At present, more than 150 local platforms are providing capacity support for AutoNavi’s “Second Ring”. In terms of operation, AutoNavi encourages the internal “Second Ring” platform for bidding ranking, and service providers with lower quotations rank higher and are more likely to be selected by users.
It is understood that AutoNavi’s next main strategy is to use the small and medium-sized online car-hailing platform to further increase the penetration rate in third- and fourth-tier cities and below; regulatory requirements.
After the surge in orders in the third quarter of last year, AutoNavi gradually adjusted its focus to digging out drivers and cultivating capacity. Bailongma Technology currently has more than 2,500 employees, most of whom are offline promoters, recruiting more platforms for AutoNavi and finding more drivers to join.
In the past year, the number of market orders has been sluggish, and the oversupply of drivers has made many drivers need to register for two platforms at the same time to run together in order to ensure a basic monthly income. In the past year, several poaching methods commonly used by AutoNavi’s platforms include multiple commission poaching from service provider companies, offline push-ups, internal countermeasures in Didi driver groups, and one-to-one poaching of Didi’s high-service sub-drivers.
“LatePost” learned that AutoNavi’s self-operated taxi-hailing project “Rocket Travel”, which has been planned since the second half of last year, is in charge of Beijing Litong Travel, a wholly-owned subsidiary of AutoNavi, and the project is under preparation. It was originally planned to land in Beijing and other places in March this year. AutoNavi prepared 2,000 vehicles in Beijing for this purpose, but the project failed to go online as scheduled.
People close to the project revealed that Beijing has not issued new online car-hailing licenses since 2018, and more than a dozen platforms such as AutoNavi and T3 are currently queuing. Other regions are affected by the epidemic.
AutoNavi is Didi’s largest partner. During peak periods, 80% of the orders in AutoNavi are carried by Didi. For partners, AutoNavi charges information service fees, 9% of revenue from a single order to service providers such as China Travel and T3, and offers Didi a discount lower than the average rate of “One Ring”.
Beginning in July this year, some users could not find the Didi Express option in AutoNavi, and it was suspected that the grayscale test cut off the Didi interface. “LatePost” selected 15 users in different cities for testing, using the latest Android/iOS version of AutoNavi to place orders in 13 first-, second-, and third-tier cities, and 7 people could not find Didi Express in the AutoNavi aggregation menu.
In this regard, both companies said that the cooperation is still normal.
In the past year, the online car-hailing market has been in flames, but most of the time it was unilateral harassment and testing by challengers. The sign of the real beginning of the war is that the monopoly begins to draw a clear line with the second place, make a clear move, and start a counter-offensive.
T3 and Cao Cao, the fate of other players
In the past year, both T3 and Cao Cao have accelerated their expansion, hoping to leapfrog from a regional platform to a national platform in one fell swoop. They all want to be second.
The sudden opportunity broke their established rhythm. Due to insufficient funds, personnel and technical reserves, internal and external problems broke out in the expansion.
In July last year, T3 Travel issued an internal letter saying that it had encountered a once-in-a-lifetime development opportunity, and started a full-staff combat mode. The production and research department implemented 007 all month long, requiring 15 cities in a single month, and the average daily order volume exceeded 100. Ten thousand. Cao Cao began to expand subsidies, planning to do 20% of the national market share.
Both companies are inseparable from the support of the major shareholders behind them. Cao Cao Chuxing was founded by Geely Auto in 2015 and is the first online car-hailing company to use new energy vehicles; T3 Chuxing was jointly established by three state-owned car companies, FAW, Dongfeng and Changan, and Internet companies such as Suning and Ali.
The core teams of both companies have no experience in ride-hailing and internet. Liu Jinliang, founder of Cao Cao Travel, was in charge of Geely’s auto sales and new energy vehicle research and development. Cui Dayong, CEO of T3 Travel, came from a sales background and served as the general manager of the FAW Group Sales Company. Most of the core executives were dispatched from three automakers.
The complex background of T3 determines that there are different demands among shareholders. In the first two years of the company’s establishment, the vast majority of management decisions were made by Tan Tianlong, the CTO nominated by Changan Automobile. At the end of 2020, Tan Tianlong and other Changan officials left T3, and Cui Dayong from FAW officially took power. After that, the company’s CTO changed twice a year. The former Cainiao Network CTO Gu Xuemei (flower name: Kang Duo) and the former Xueer Sipeiyou CTO Li Jingfeng were in charge. The frequent changes of executives also led to changes in business strategies.
In terms of development rhythm, T3 is more radical than Cao Cao. Cao Cao Travel mainly subsidizes Hangzhou, Chongqing, and Chengdu as the main cities. During the peak period, the subsidy for each order is not less than 20%. It once won the second place in the online car-hailing market. In 2020, T3 will catch up later, setting up bases in Nanjing, Wuhan, Changchun, and Chongqing, investing more subsidies, and surpassing Cao Cao’s orders during the year.
Before July last year, Cao Cao had opened 62 cities. T3 operates in 36 cities. In the following year, Cao Cao opened 14 new cities and T3 opened 67 new cities.
The market has confidence in a short period of time, but the confidence is still not enough. Although T3 and Cao Cao received financing of 7.7 billion yuan and 3.8 billion US dollars respectively, they both came from the support of old shareholders and the blessing of local state-owned assets. It is more resource synergy than financial investment. Over the past year, no more internet companies or dollar funds have been willing to follow up on ride-hailing investments.
The speed of burning money and the difficulty of becoming a national platform also exceeded the expectations of the two companies. In the third and fourth quarters of last year, T3 attracted passengers and recruited drivers with a monthly subsidy of no less than 300 million yuan, and Cao Cao gave a monthly subsidy of no less than 150 million yuan. In the first quarter of this year, both companies reduced subsidies. At the same time, affected by the epidemic, the number of T3 orders dropped by one-third from the peak of 3 million orders last year.
One headache for both platforms is traffic. They did not build a national brand in the past, and today they need to pay a higher cost to pull new ones. The cost of a single pull of T3 is about 100 yuan, and the cost of cultivating a new user into a long-term user is 500-600 yuan.
In order to grow, they all had to choose to take orders from the aggregation platform, but these orders could not be converted and deposited in the app, causing the brand to become the transportation service provider of the aggregation platform. At present, nearly 40% of T3’s daily orders come from AutoNavi, and 50% of Cao Cao’s orders come from AutoNavi and Meituan.
In this regard, T3 Travel said that it has not done the overall statistics on the proportion of AutoNavi’s orders. Currently, T3’s orders from the AutoNavi platform in first- and second-tier core cities account for about 20%. Cao Cao Travel stated that it is inconvenient to disclose operational data involving subsidies and targets, and is not responsible for the authenticity of the above data.
Expansion also faces various uncontrollable factors. In the past, T3 had the support of the three major automakers in its external publicity, but the real model was that the three major automakers set a car sales target for T3, and the depots set up operators in each city to be responsible for vehicle purchase, operation and driver management. T3 needs to recruit and promote its own brand to ensure that the purchased car can be rented out. If the target cannot be achieved, T3 needs to compensate the operator for guaranteed income. The advantage of this is that you can buy a car at a lower price. The disadvantage is that the expansion does not meet expectations, which will greatly speed up T3’s cash flow consumption.
Cao Cao could not lose money for a long time. Geely is exploring multiple businesses at the same time, and may abandon unprofitable projects at any time. At the beginning of this year, Liu Jinliang, the former chairman of Cao Cao, began to prepare a new project “Happy Thousands of Homes” in Chongqing, providing drivers with services such as vehicle sales, leasing, examination and certification, and replacement of batteries. In June, Cao Cao Travel reported that 40% of its staff had been laid off, and Cao Cao Travel responded that the company was making normal business adjustments.
Today, investors’ attitude towards online car-hailing has changed to resource coordination, giving priority to recovering investment costs, and it is more difficult to seek new financing. At the beginning of this year, T3 and Cao Cao have sought new financing for many times, but no new progress has been made so far. What the company can do now is to increase revenue and reduce expenditure. A T3 employee said that since June, the company once saved enough to require employees to turn off the lights and water, and the water flow in the bathroom decreased, and the normal travel reimbursement review period was also extended. .
A number of people close to Cao Cao and T3 told us that if the current expansion pace is maintained and there is no new financing supplement, T3’s book cash may be used up by the end of this year at the earliest and before the first quarter of next year at the latest. Cao Cao’s cash flow is even tighter. In March, Cao Cao gave up the target of 20% market share in the country set at the beginning of the year, gave up expansion, and focused on reducing losses. In July, Cao Cao traveled for the first time to access Didi Special Offers and Hua Xiaozhu, and the proportion of external orders increased to 2/3.
For Cao Cao and T3, the most optimistic outcome is to return to the regional market and continue to exist. The unoptimistic outcome is that they failed to become brands and were forced to degenerate into transportation capacity service providers.
When opportunity comes, it may not belong to all players, bad judgment can lead to disaster for the entire company, and founders and executives need to pay for bad judgment.
In the past year, the rapid growth of market participants such as AutoNavi and T3 does not mean that the market is getting bigger, but the redistribution of interests. In the past, the first place in the industry mastered the pricing on the passenger side and the commission on the driver side. The latecomer AutoNavi distributed the benefits to more platforms, service providers, and car rental companies, and joined them to challenge the first place, so it was able to grow bigger.
But after breaking through, the latecomers still need to do what the first place did again. Heavy assets, heavy investment, and compliance are all unavoidable problems.
After ten years of development of car-hailing in China, the first-, second- and third-tier cities are relatively saturated. If it is not possible to reduce costs and improve efficiency as a whole, making taxis cheaper, the entire market will hardly change. What determines the ultimate scale of ride-hailing is not how much subsidies companies give out, but the purchasing power of Chinese consumers. According to data from Beijing Normal University and CICC, in 2019, only more than 70 million people in China had a per capita monthly household income of more than 5,000 yuan, and they were the main consumers of taxis. The number of people who can continue to spend on online car-hailing is far less than expected. At present, various online car-hailing platforms are working hard to gradually replace fuel vehicles with electric vehicles, which can greatly reduce costs, but it will take time.
Before that, car-hailing would have been a bitter business that lacked imagination and profitability. Whether the current leading Didi or the chasing Gaode, the continuous spectator Meituan and the frustrated T3 and Cao Cao have to accept the heavy and cruel reality.
This article is reprinted from: https://www.latepost.com/news/dj_detail?id=1273
For personal collection only, the copyright belongs to the original author
The never-quiet car-hailing, The Battle of Silt and Sand appeared first in Haowen Collection .
This article is reproduced from: https://shoucang.zyzhang.com/%E6%B0%B8%E4%B8%8D%E5%B9%B3%E9%9D%99%E7%9A%84%E7%BD%91% E7%BA%A6%E8%BD%A6%EF%BC%8C%E6%B3%A5%E6%B2%99%E4%B9%8B%E6%88%98/
This site is for inclusion only, and the copyright belongs to the original author.