After many cycles, as soon as the "boots" of online car-hailing legalization landed, Didi and Uber China announced a "marriage".On August 1, Didi Chuxing announced a strategic agreement with Uber Global, which will acquire Uber China’s brand, business, data and other assets to operate in the Chinese mainland. Uber Global will own 5.89% of Didi.
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After the merger of Didi Chuxing and Uber China, it will firmly hold the top spot in China’s private car market. Is the merger of the two suspected of monopoly? What impact will consumer travel be?
Will it be rejected by the Ministry of Commerce because of suspected monopoly?
The spokesperson for the Ministry of Commerce said at today’s regular press conference:The Ministry of Commerce has not yet received a declaration of concentration of operators for the China-related transactions of Didi and Uber.(Concentration of undertakings refers to the situation in which a business operator obtains control over other business operators or is able to exert decisive influence over other business operators through merger, asset purchase, share purchase, contractual agreement, personnel arrangement, technical control, etc.)According to the declaration conditions stipulated in the Antimonopoly Act and the provisions of the State Council on the declaration standards for concentration of undertakings, all business operators shall declare to the Ministry of Commerce in advance, and those who fail to declare shall not implement concentration.
"Provisions of the State Council on the Declaration Standards for Concentration of Business Providers":If the concentration of undertakings meets any of the following standards, it shall be reported to the commerce department of the State Council in advance before the concentration:
First, all business operators participating in the concentrationThe total global turnover in the previous fiscal year exceeded 10 billion yuan, and at least two of the operators had a turnover in China of more than 400 million yuan in the previous fiscal year.
Second, all business operators participating in the concentrationThe total turnover in China in the previous fiscal year exceeded RMB 2 billion, and the turnover of at least two of the operators in China in the previous fiscal year exceeded RMB 400 million.
Didi Chuxing responded:At present, neither Didi nor Uber China has achieved profitability, and Uber China’s turnover in the last fiscal year did not meet the reporting standards.Therefore, in accordance with the "Antimonopoly Act" and "Regulations of the State Council on the Declaration Standards for Concentration of Operators", there is no need to declare to the relevant departments in advance. Didi Chuxing will maintain active and smooth communication with relevant departments.
Expert:From the market share data, it is already an oligarchy, but there will always be new entrants in the market, especially in a functional travel market with such great potential, there must be many new players joining.
Will there be subsidies and red envelopes for taxis in the future?
Didi responded:Over a long period of time,The red envelope subsidies for passengers and driver incentives will continue to be distributed. This merger is difficult to have a fundamental impact on the current market price of online ride-hailing.The Chinese market has nearly 800 million urban population, Didi’s penetration rate is only about 1%, and there is still a broad space for development.Subsidies are one of the ways to attract users, which will have an intuitive effect in the short term and will not be given up easily.
Passengers are concerned about:There is such a "taxi formula" circulating on the Internet:Uber is used within 9 kilometers, Didi is used for 9 to 16 kilometers, and it is easy to reach for more than 16 kilometers.Some netizens said,This "formula" is a good example of the benefits of market competition for consumers, but it may no longer apply in the future.
Driver:Didi drivers’ income is divided into three parts, including commission income for each order + reward for order completion + double premium during peak hours.Some drivers said that if the subsidies were further reduced after the merger, they would no longer be full-time drivers.
Industry insiders:The merger of the two parties may bring about a reduction in subsidies, but prices will not skyrocket.
How should we view the merger of Didi and Uber?What will be the impact on the market? Apart from worrying about price increases, what else should be noted?
CCTV Review
The absence of free lunches has long been known, but the absence of cheap ride-hailing is gradually becoming a reality.
Neither company can eat the other, and investors often demand a merger
Ride-hailing is a winner-take-all industry, and only with more drivers and more passengers can a niche market of sufficient scale be built. In order to race the horse, whether it is the native Didi or the foreign monk Uber, they have resorted to the magic weapon of subsidies to exchange money for time, trying to bring the most consumers into their sphere of influence in the shortest time.So they fought a multibillion-dollar price-subsidy cut-throat battle over the past two years, hoping that competitors would collapse due to lack of follow-up vitality. But both sides undoubtedly underestimated the other’s resilience and the other’s ability to continuously move rescue funds.So when the close-quarters cut-throat battle turned into an anxious protracted battle, it only ended in exhaustion on both sides.
In this long-running battle between merchants, consumers seem to have become the winners. After all, online car-hailing is much cheaper than taxis. Coupled with the subsidies provided by the two companies, taking online car-hailing can also be considered an option to reduce the burden on the wallet.However, price baiting is just a way to expand the market, rather than a routine practice.For merchants, once they control enough of the market and have less competition, they are already oligarchic in terms of market share data.
Merger and reorganization at an appropriate price is a requirement driven by capital forces
From now on. As China’s ride-hailing market has exploded in the past two years, it has been called "fattening", and the remaining question is who will "use the knife" to raise prices.In the pattern of two-headed competition, the one who takes the lead in "using the knife" means giving the user to the opponent first, thus forming a "balance of terror".But when the market is fat enough and competitors are exhausted, both sides have the intention to stop, and then it is time for capital brokers to go into battle.Getting the two competitors to sit down and merge and restructure at an appropriate price is also a requirement driven by capital forces.
Due to the requirements of market forces, the price of online car-hailing will not continue to rise
When the market is fat and competitors disappear, subsidies are reduced and prices rise as a matter of course. And this dominance of the market gives the company with the monopoly position in the market the dominant price.Of course, price increases will be a process of small steps. In order to quell the rebound in consumer sentiment, price increases will not be achieved in one step. However, this trend is irreversible. After all, the cost of transaction mergers needs to be ultimately borne by every car-hailing consumer.The price of online car-hailing will not keep increasing, but will be capped at a price slightly lower than that of a taxi, which is a requirement of market forces, otherwise consumers will not buy it.In terms of business sustainability, it should be stable. It should gradually reduce subsidies and provide more value-added services while users feel the price increase.
The price of online car-hailing is the result of the game between capital profit demands and public interests
Of course, combined with the previous paragraph to make online car-hailing legal, it will be found that this move is to force taxi reform to meet market demand, with the aim of safeguarding the public interest.But on the other hand, if the price of online car-hailing rises to a level close to that of taxis, there will be a diminishing marginal effect on taxi reform.Therefore, the final level to which the company will increase the price of online car-hailing will be the result of the game between capital’s profit appeal and the public interest.
Wang Yahong, an expert on financial issues