China’s Didi Improves Transparency For Drivers’ Salaries By Providing Access To Pay Breakdown

Chinese ride-hailing giant Didi Chuxing said on Monday that it will provide its drivers in several Chinese cities with more details on the fees they receive, in a bid to improve pay transparency, especially on drivers’ remuneration, amid accusations of unfair commission rates from the state media.

The company will be launching a new feature that will provide drivers a breakdown of their pay and commission rates, Sun Shu, CEO of Didi’s ride-hailing business and head of its driver’s committee said, in an open letter referred to the company’s drivers. The new function which Didi added to its app for drivers on Monday will grant drivers in seven Chinese cities including Shenyang and Changchun, first-hand information of how much they get and how much passengers pay for each ride.

Commencing from July, all the platform’s drivers will be able to access and view three sets of figures: the proportion of income earned per ride order in the past week; the average proportion of income earned from all orders in the past seven days; and the average proportion of income earned from all orders in the last day.

The company said that it will continue to adjust its pricing strategy after receiving drivers’ responses. “There are still many shortcomings with this transparent income statement that was delivered late, we will continue to improve it and work hard to expand it to other cities,” Didi said.

In May, China’s state news agency Xinhua carried an investigation which revealed that Didi received more than 30 percent of what customers pay for a ride and criticized the policy that it described as unfair.

After the Xinhua report, Didi said in a post that drivers on average received 79.1 percent of passenger fees for rides last year and that 3.1 percent of fees went towards its profit.

Didi’s CEO, Sun Shu admitted that the company’s move of revealing for the first time its income mechanism and breakdown of costs per average for 2020 did little to regain its drivers’ trust.

Didi said that out of all orders, it had 2.7 percent of “extreme cases” which reported that Didi received 30% of the total trip costs. In his letter, CEO Sun Shu emphasized that the figure has been lowered to 0.03 percent since the seventh of May. “We will do our very best to keep this number down until it is completely eliminated,” Didi said, adding that it welcomes its drivers to report such cases.

Last month, Didi filed confidentially with the US Securities and Exchange Commission (SEC) for an initial public offering led by Goldman Sachs and Morgan Stanley. The company went ahead with its $4.4 billion New York initial public offering in June despite pushback from the Cyberspace Administration of China (CAC).

Didi was among the platforms that were summoned by Chinese regulators on the fourteenth of May for talks over excessive commission rates, unfair pricing, and other improper practices.

Chinese regulators ordered the platforms to improve pricing and distribution mechanisms and to keep drivers informed of commission and intermediary fees. The platforms were also ordered to rectify practices that violate gig workers’ rights and avoid excessive overtime.