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Analysis

Meituan vs. Didi: The Story Behind the Statistics

Apr 11, 2018 by Yun Nie
Meituan vs. Didi: The Story Behind the Statistics

March 21st was a bright day for Meituan - the Chinese group-buying website specializing in localized consumer services debuted its online-taxi-calling service in Shanghai.

Within the first three days, Meituan grabbed over 30% of the local market share, forcing Didi, the previous monopoly-holder, to pick up the gauntlet and fire back at its longtime rival.

The progressively intense business battle between the two companies in Shanghai has been triggered by their bonus plans through which Meituan has struggled to gain passengers and drivers, while Didi has strived to retain them.

A recent article in 36kr.com has demonstrated differences of the two companies’ bonus plans, categorizing them into two groups: “Drivers” bonus and “Passengers” bonus.

“Drivers” bonus

(1) Commission

Meituan has instituted a commission-free plan for the first 20,000 Shanghai drivers and 50,000 Beijing drivers who will register an account in the first three months. After this period, an 8% commission on deals would be applied.

In contrast, Didi forcibly levied a 20% – 30% commission on deals without any discount.

Based on rough calculations, drivers who could earn CNY 500 every day using Meituan’s online-taxi-calling service might get a daily wage less than CNY 400 using Didi. Thus, Meituan would win users through their attractive commission bonus.

(2) Minimum daily wage

Besides the commission bonus, Meituan has determined to reward a minimum daily wage of CNY 600 to Shanghai drivers who stayed online more than 10 hours between 6:00 to 24:00 and fulfilled at least 10 online taxi-calling orders. Extra CNY 200 bonus would be awarded if the drivers fulfilled orders valued at CNY 600 or more.

Comparatively, Didi has provided a minimum daily wage of CNY 500 to Beijing drivers if they could remain online more than 10 hours. Unlike Meituan, Didi’s extra bonus would depend on how long they stayed online – after 10 hours, drivers would gain CNY 50 per hour. The minimum daily wage would rise to CNY 800 when online time exceeded 14 hours.

Meituan would observe drivers for 6 workdays to ensure that they cancelled less than 10 orders during the time without click farming and other cheating behaviours before they would be eligible for the minimum wage.

Didi instead, would require drivers to stay online for more than 24 days every month. They would need to be rated 8.5+ on a 1-to-10 scale and contract with Didi for at least one year.

In this round, Meituan tends to be more competitive than Didi due to relatively looser restrictions, particularly for part-time drivers who are unable to meet Didi’s stringent standards of remaining online for 12 – 14 hours every day.

(3) Time-based bonus

Based on different time periods, Meituan has offered bonuses depending on the amount of online taxi-calling orders completed by drivers, while Didi would rely on districts to distribute bonus.

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(images from http://36kr.com)

As the above images indicate, Meituan might be more appealing because Meituan’s drivers enjoyed a longer bonus time than Didi’s and would not be bothered by the district limitation.

“Passengers” bonus

(1) Coupons

In Shanghai, the first three passengers who utilized Meituan to call a taxi would get CNY 14 off in addition to other coupons.

Compared to Meituan, Didi has boasted of a variety of coupons including discounts of 30%– 60% and CNY 6 – CNY 7. Didi’s users would receive dozens of coupons with a free SMS notification service.

Therefore, Didi wins this round based on quantity and quality of the coupons.

(2) Invitation bonus

Residents in Nanjing could get a special bonus by inviting their friends to use Meituan. Once a new user creates an account and places the first online taxi-calling order, the inviter would obtain a red packet containing a fixed amount of money.

Didi, in contrast, has provided no such invitation bonus thus far.

According to the above comparisons, Meituan’s “Drivers” bonus is salient, but in terms of “Passengers” bonus, the two companies have slight variations. It is more likely that drivers predominantly choose Meituan’s services, while passengers are quite happy to see both apps coexist on their smartphones.

Yun Nie

Yun Nie is a New York-based tech reporter. She focuses on India-China financial market, global IT giants and technology-centric market trends. She can be reached at Yunnie@thepassage.cc.

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