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China Criticizes Subsidized Ride-Hailing Apps As Anti-Competitive (thestack.com)
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.
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.
I prefer the "u" in honour as it seems to be missing these days.
Nearly every major industry in the Chinese economy has been subsidized by the government, esp those related to exports.
You'd think China of all countries could appreciate a masterful application of dumping 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.
Don't waste your vote! Vote for whoever you want, unless you live in a swing state it won't matter anyways
It's an old market manipulation technique: give your product away to increase market share, and then cash in when you drive as many competitors as possible out of the market. It takes time to smelt metals, build assembly lines and crank up production.
But this doesn't work so well with services, especially those with little capital investment. A ridesharing service doesn't even have to build fast food stands.
...They sure are Capitalistic.
It's an old market manipulation technique: give your product away to increase market share, and then cash in when you drive as many competitors as possible out of the market. It takes time to smelt metals, build assembly lines and crank up production.
But this doesn't work so well with services, especially those with little capital investment. A ridesharing service doesn't even have to build fast food stands.
No, a ridesharing app doesn't have capital but most of it's competitors do. If it runs all the taxis, buses, etc... out of business then jacks up it's rates, it takes time to assemble a new fleet of buses, routes, etc... at which time it could again lower its rates. A virtual company that can fade away and come back can cause havoc when competing against another industry that has significant startup cost. And this doesn't mean that the virtual company is better. There are many businesses with significant startup costs that are cheaper and better for consumers once they are up and running and the government should take steps to prevent other companies from doing short term dumping in an attempt to run them out of business.
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 economy before, but it's easy to see why they don't want Western investors monopolizing their taxi industry through this strategy (and for that matter they need to get a lot of autos unloaded into the consumer market).
--hongpong.com
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.
Yes Francis, the world has gone crazy.
Is this something Uber is only doing in China?
I've never heard the company subsidizing drivers here in the US???
That part sounds a bit fishy to me....
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
it takes time to assemble a new fleet of buses, routes, etc...
They'll be back on the street inside of a month. China is not some feeble developed world economy where endless paperwork has to be processed before anyone does anything. The endless paperwork does need to be processed, but that can happen after the fact.
I think if you are willing to commit to being at least competitive with would-be upstarts, even if you still want to be profitable, the marketing momentum of being an established brand is potent stuff, even though the technical barriers to entry may be lower.
XML is like violence. If it doesn't solve the problem, use more.
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 one can argue deserve what they get. It's so easy to take advantage of a people who adopt the attitude of "every man for himself" which is the culture the government has spent a lot of time and resources to cultivate. And to their long term detriment, is exactly what they have achieved. The joke in China is, money is the national religion.
"Imagination is more important than knowledge" - Einstein
They'll be back on the street inside of a month.
They will be back much quicker than that, because they will never be off the street. In most countries Uber competes with taxis. But in China, the taxi drivers are Uber drivers, and also Didi Diche drivers. Nearly every taxi driver has a smart phone will all the apps, as well as a meter. They take riders from any source. Most urban taxi passengers also have all the apps. I can't see how any of these services can "drive out" any other, since there is near-zero fixed costs to running a server. As soon as one raises prices, customers will just tap on the other icon.
China is a huge market for ride apps. Most people do not own a car, and even those that do are often restricted from driving them by odd/even day rules in some big cities. I can see why companies want to be dominate the market, but I can see how they can do that by price alone. Often the cheapest way to get a ride in China is to hail a taxi on the street, and ask the driver to go off-meter for cash.
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 are competent. Others drive like it's their first day in the city with no real clue where to go despite having GPS on their phone.
Also, "better for consumers" usually means "better for the citizens overall". This is far from different than "better for the average person". Ensuring there is special consideration given for service to those with physical disabilities, or avalable service to troublesome parts of a city for example.
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
When it's foreigners doing it to you, does it China?
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...
It's an old market manipulation technique: give your product away to increase market share, and then cash in when you drive as many competitors as possible out of the market.
It's something that should have been made illegal a long time ago.
You Must Not/May Not as a For-Profit entity come to market and offer services or goods in a competitive market for less than it costs you to provide that particular service or manufacture that good.
The cost to provide a service is at minimum the cost of any labor, materials, energy, supplies to provide, manage, support, bill, account for that service, and a proportionate share of all costs required to develop the service.
The cost of a good is at a minimum the sum of the fair market value of its materials plus the cost of any supplies, labor, services obtained required to assemble the good, and a proportionate share of all costs required to engineer, design, and execution of all manufacturing processes for the product.
If you bundle and provide multiple services or products together, then you MUST also facilitate the purchase of every product and every component of every individually, And You may NOT provide for free or sell a bundle of products and/or services to consumers for less than the total price of each item: Except you do not have to offer components you purchased entirely from another supplier, so long as they are commodity parts generally available on the market for the duration of time you sell your goods, And do not have to offer every component of an intangible work individually, for example, you do not have to offer Pages 1 through 5 of a Book or Manuscript as a separate purchasable product.
For the exception to be valid; the components bundled together must be entirely software, or entirely information, and the maker of the product formally declares in writing that each bundled discrete component or product part is incapable of being made to have independent function; And only Informational or entertainment value on its own.
For example: Chapter 6 of your new book on its own has only Entertainment value; contents of a book do not provide functional value, therefore, there is no reason they cannot be bundled.
For example: The Apple iOS Mobile operating system is software, But the iPhone 5 is a piece of hardware. Because hardware is tangible, the two products cannot be forcefully bundled together. The two products must be available for separate purchase, and the software cannot artificially prohibit its use with alternative hardware components.
The Windows Operating System and Calculator program provide functional value, a Calculator program C:\windows\system32\calc.exe can be written or modified to function independent of the operating system, therefore, the two components cannot be forcefully bundled.
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.
the government should take steps to prevent other companies from doing short term dumping in an attempt to run them out of business.
Yes.... IMO the government should impose capital costs on these businesses.
I would suggest a tax paid upfront based on the number of unique vehicles used.
Example: $315 per Month per unique vehicle used with the service during that month.
It would probably be most useful if the registration and administration for this can only be done by the driver; go to the local DMV: Cashiers check only. Then you get your sticker; Which the laws should be set up so the "Ride sharing company" must then verify, scan, and track the status of.
Unless they paid $4000 for the whole year, with an extra $210 convenience fee, then next month, they must repeat the same manual steps.
Essentially, a disincentive to bringing on contractors who will only make a part-time commitment. Since they no longer get to enlist vehicles nearly for free and only pay driving labor.
The tax proceeds should be reserved for the purposes of covering damage claims: in case the company becomes insolvent, and the taxing authority would also have the option later to use proceeds to rebuild the local market, or to help provide new job-reeducation assistance for former commercial drivers displaced from their jobs.
They mean "cheaper" than the guys who are paying us kickbacks....
"I do not agree with what you say, but I will defend to the death your right to say it"
"...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/...
http://www.economist.com/news/...
blindly antisocialist = antisocial
Why is is that Facebook and Uber have remained centralized all these years. Want to control logistics, profit, and privacy (your content), the solution is to throw all this into P2P mode. Want to go offline and take your content with it, fine, shutdown the computer hosting the content. Should a user stumble across an old user thread, if the PC that was associated with isn't online, the content is listed as N/A. None of this shit about storing years of user comments and photos. Further more, none of this BS about them middle-man creaming the near entire profit incentive for participating in services like Uber int he first place.
It's time for people to pull their collective heads out of their asses.
Life is not for the lazy.
the government should take steps to prevent other companies from doing short term dumping in an attempt to run them out of business.
Yes.... IMO the government should impose capital costs on these businesses.
I would suggest a tax paid upfront based on the number of unique vehicles used.
Example: $315 per Month per unique vehicle used with the service during that month.
It would probably be most useful if the registration and administration for this can only be done by the driver;
go to the local DMV: Cashiers check only. Then you get your sticker; Which the laws should be set up so the
"Ride sharing company" must then verify, scan, and track the status of.
Unless they paid $4000 for the whole year, with an extra $210 convenience fee, then next month, they must repeat
the same manual steps.
Essentially, a disincentive to bringing on contractors who will only make a part-time commitment.
Since they no longer get to enlist vehicles nearly for free and only pay driving labor.
The tax proceeds should be reserved for the purposes of covering damage claims: in case the
company becomes insolvent, and the taxing authority would also have the option later to use
proceeds to rebuild the local market, or to help provide new job-reeducation assistance for former commercial drivers
displaced from their jobs.
Is this sarcasm? I can't tell. Anyways, although preventing dumping is the responsibility of the government, I'm not sure what you're trying to solve with charging the driver for taking on part-time work. I have no problem with part-time workers. I actually think ride sharing apps would work better if they would have stayed ride sharing and people only picked up fare when they were going that direction anyways.
Sounds like a rotten deal for consumers. Cheap rides? What next, cheap education? Prices will rise in the future regardless.
This posting is provided 'AS IS' without warranty of any kind, implied or otherwise.
Uber is losing US$ 1 billion a year. They offer a cheaper service, while losing money, which caracterizes dumping. When the China's miniter calls that 'subsidizing', I think it's a euphemism.
Linux is for people who don't mind RTFM.
Education is already free in China, officially, at least.
Linux is for people who don't mind RTFM.
I think subsidy could be repurposed to include "any organization". It's a preferable english term to me than say, "perpetual venture capital injection" or "corporate welfare".
Often wrong but never in doubt.
I am Jack9.
Everyone knows me.
Given your name and previous comments, do you think that China will reach a point where they have more automobile owners? I've been to China few times and one of the things that I've noticed is a whole of automobiles there now. I mean, a lot. Even if you get outside of the main areas and tourist traps, there's still a lot more automobiles than I recollect.
Also of note, it's interesting how many Western automobiles I noticed there the last time I visited. I don't have numbers or research to back me up (I've not bothered looking) but there are an increasing number of American and, to some extent, German automobiles. Oddly, or perhaps not, I can't say that I noticed a whole lot of Japanese automobiles. Or, at least not an increase in them and not a whole lot to begin with. (I'm an automotive enthusiast.)
But, they've got a lot of people and everyone seems interested in buying a car. I'm told that it's rather expensive and that there are some restrictions - important considering the quality of the air, but that doesn't seem to be stopping them. Do you think this trend will continue? Does it have room to continue? They've really, really (or I may just be misinterpreting or something) increased the number of automobiles - the traffic is rather intense.
Disclosure: I am technically retired but I do have business interests and investments (several) in China that I will *not* discuss here except to say that they're coming along nicely and they're not the least bit interested in taking away any American jobs, for what it's worth.
"So long and thanks for all the fish."
> Is this sarcasm?
I've seen their posts before and I do not think it is sarcasm. I am not sure what they're trying to accomplish but it means taxing someone so surely it's good?
This is a guess and not an accusation but I suspect that the tax would not involve anything they're currently involved in or intend to be involved in at some future time. I'd further suspect that they're not intimate with anyone that would be impacted by this particular tax.
It's similar, but not exactly alike, to those who rail against the 1%. When you point out that they are in the global 1% then they either change that to mean a subset of the population or they change it to the .2%. Another, more amusing to me, example is those that rail against corporations. When you point out that EFF, FSF, and The Linux Foundation are all corporations (more fun after getting them to confirm that they do, indeed, mean *all* corporations) usually gets some interesting responses that amount to, "Fuck you, you know what I meant." No, no I didn't know what they meant and I've no idea why they want to take away the rights of people to form a legally recognized group while also holding the view that unions are acceptable. My guess is that it's that they only want groups of people that they agree with but that's still just speculation and a topic for another day and another thread.
At any rate, I don't see a hint of sarcasm. Everyone wants someone to pay more, either to pay for something they don't want to pay for or to curtail a liberty they're not currently taking advantage of. Self-interest is, after all, a human trait and a probable result of evolution. Self-sacrifice looks good on paper but means you're first into the lion's den. Pragmatism has its place, as does moderation.
"So long and thanks for all the fish."
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.
Hmmm. Your ideas are intriguing to me and I wish to subscribe to your newsletter.
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 novel that I most recollect was Misnomers and Impervections. It was, indeed, about a Perv though it was not probably what most would assume a Perv was but actually a scaly lizard-like humanoid. Yeah, that was not a great era for fantasy but Pratchett was just around the corner. Some of the longer series were okay - like the One Gold Wielder (I think was the name - Donaldson maybe?) and a few others. Xanth was big but I'm not a preteen girl and Anthony had some almost good science-fiction before devolving to fantasy.
"So long and thanks for all the fish."
China Criticizes Subsidized Ride-Hailing Apps As Anti-Competitive
Ah, this sounds like music to my ears!
Play it again, Sam! :-)
Lisias@Earth.SolarSystem.OrionArm.MilkyWay.Local.Virgo.Universe.org
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.
Use of the words "good", "bad" or "evil" is almost invariably the result of oversimplification.