Didi suspends carpooling business after murder of another passenger
Photo: image.baidu.com 
 
Didi Chuxing, China’s biggest ride-hailing service has announced to suspend Hitch, its carpooling business, nationwide while it re-evaluates its “business model and logic”, after a 20-year-old woman passenger was raped and killed by a driver registered with the platform. The murder case has once again fueled public concerns over safety issues related to Didi’s ride-hailing service, only months after a similar incident took the life of a young airline stewardess and prompted overhaul of all Didi platforms including Hitch.

On Saturday, police in the eastern Chinese city of Wenzhou said on its microblog that the 20-year-old victim surnamed Zhao got in a Didi Hitch sedan at 1 pm on Friday and could not be reached by phone anymore after sending text messages to her friends calling for “help”.

At 4 am Saturday, the police arrested the Didi driver surnamed Zhong, who soon admitted to raping and killing the 20-year-old, before pushing her body off a cliff. With Zhong’s confession, the victim’s body was recovered and the cause of the death was determined to be knife stabbing in the throat.

The incident immediately hit national headlines, while igniting heated debate on Chinese social media with five of the top 10 ‘hot search’ topics being related to the murder. Zhao is the second Didi passenger to be killed. Just three months ago, the 21-year-old Lucky Air flight attendant Li Mingzhu was stabbed to death by her Didi driver, raising widespread safety concerns over the car-hailing firm, now the biggest one in the sector globally by the number of trips.

In Li Mingzhu’s case, Didi claimed the killer had illegally used the Hitch account of his father while in the current case, the unicorn company admitted that the suspect Zhong had passed its Hitch platform’s background checks, logged in with his authentic ID and was confirmed by facial recognition that day when the killing happened.

More importantly, it’s disclosed by the Chinese media and later confirmed by Didi that the tragedy could have been avoided if there were more effective safety measures in place.

On Thursday, just one day before the murder, another woman passenger filed a complaint against Zhong, claiming that the driver repeatedly insisted on her taking the front seat and took her to a remote area where even after she forced her way out of the car, Zhong still chased her for a while, until she warned to call the police.

Didi acknowledged although what happened the previous day had been fully reported to its customer service department, the firm failed to investigate into the matter in a timely manner, so the suspect could still pick up other Hitch passengers. After news about Zhao’s death broke, the passenger who filed the complaint talked to the media, saying she got no response from Didi yet and regretted for not reporting her case to the police.

The company has released two statements after the incident. In the first one, it expressed deep remorse for failing to deal with the previous day’s complaint against Zhong while pledging to shoulder all “incumbent responsibilities”. It also said it will compensate for all personal injuries involved in future criminal cases by “three times (the amount of money) regulated by the law”, although many Chinese netizens lashed out at the promise of “threefold compensation”, arguing a human’s life could never be measured by money.

In its second statement released at noon Sunday, Didi announced to temporarily halt its Hitch platform, through which the two female victims had arranged their rides and got killed. During the suspension, it noted that the carpooling app’s “business model and product logic” will be reviewed. Didi also removed two of its top executives - Huang Jieli, the general manager of Didi Hitch, and Huang Jinhong, the vice president in charge of the company’s customer service department.

According to data released by Didi, in 2017, its platforms handled 7.43 billion trips of 450 million users in over 400 Chinese cities. The embattled Hitch platform has handled over 1 billion trips in its three years of operation, occupying only a small portion of the car-hailing giant’s business.

On the other hand, its Hitch platform is positioned as a public service and the company doesn’t charge the usual 20 percent commissions as on its other platforms, but only trivial expenses for providing information.

Strategic significance

Even against the backdrop, a commentary in the Legal Evening News, a Chinese newspaper surveyed, find out there was little chance that Didi Chuxing would give up its Hitch business as it strives to develop a leading one-stop auto solutions platform.

Didi has been expanding its business scope in a bid to form a complete industry chain. Since this year, the car-hailing firm has included services like food-delivery, bicycle-sharing and vehicle maintenance. But ride-sharing is one of the major parts of its business and it cannot easily pull out, especially when new entrants are keen to enter the sector.

At the current stage, with regulations in the sector continuing to be strengthened, car-sharing business is seen as a public service and it benefits from more preferential policies. So, many companies trying to dabble in the ride-hailing sector would like to start with a hitch platform, with Amap being a case in point. Although there is no specific data, it’s generally believed that Didi Hitch now occupies the biggest market share in the car-sharing business.

A commentary in the Legal Evening News said Didi Chuxing, the biggest unicorn in the industry, is “cutting its arm to save its body”. The prompt and resolute decision to get Hitch offline now could be related to Didi’s plan to become a public company in the second half of the year.

This April, the Wall Street Journal reported that Didi Chuxing is meeting with multiple brokerage firms for the IPO-related matters. The company is expected to be listed in Hong Kong by the end of May, according to several media reports. Last December, Didi announced to have secured new financing of over $4 billion, with its market value estimated to be no less than $55 billion. After the IPO, according to previous reports, the biggest car-hailing app in China was expected to have a market valuation of $70 to $80 billion.

Industry analysts say the two Didi-related murders have exposed loopholes in its management and its inability to guarantee passenger safety. With the government regulations on the car-sharing and ride-hailing markets expected to be more strictly enforced, there are concerns that the company’s grand IPO plan may be considerably influenced.

Didi Hitch has long been castigated for its incompetence in protecting female passengers. According to a New York Times report, at least 53 women have been raped or sexually harassed by Didi drivers in the past four years, citing local Chinese media, while Caixin, a weekly business publication, found at least 14 rape cases involving Didi, citing court documents.

After Li Mingzhu’s death in May, Didi had taken a series of steps to ramp up safety measures which include limiting Didi Hitch drivers to pick up passengers of the same sex during early morning and late evening hours.

Ride-sharing business would bring “quite sexy scenes, (so we must) drive in the direction”, Huang Jieli, the then general manager of Didi Hitch, was quoted by the media as saying in September 2015 when Hitch platform was launched.   

 


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