> It was widely suggested in press accounts that the Chinese government helped Didi in its battle against Uber. Cheng rejects that, noting that as the largest ride-hailing company, Didi had to shoulder most of the regulatory burden and paid tens of millions of yuan to cover driver traffic citations and other fines.
Here in 2015 is the president of Didi talking about the strong government support they received:
http://video.cnbc.com/gallery/?video=3000395252
I'm not criticizing them, if I were China I wouldn't want the USA in charge of that either, but let's not pretend this was a level playing field.
By making it effectively impossible for foreign (i.e. American) internet companies to operate in China, they've ensured that the spaces occupied by Google, Facebook, Twitter, Amazon, Uber, and even to some extent Microsoft have been filled by Chinese-owned and China-based companies.
[0] Although that too, of course.
The interesting trade-off though (as with all protectionism) is where the boundary between promoting and hindering innovation is.
VPN blocking Facebook probably has good ROI for generating internal social networks (which in turn can be monitored).
Blocking Google, even more so GitHub, seems far more dangerous economically as you impair innovators' abilities to obtain research done abroad. (Google is especially bad since a large percent of English language sites have Google dependencies (css/js hosting) -- effectively most of the English internet has become unusable in China without a VPN since the complete *google.com block went in).
But these shiny, infographic-like Bloomberg Businessweek features tend to be light and fluffy. Ugh.
1. The Android app continues to use Google Maps which is Great Firewall blocked, meaning I had to use a VPN to load uncached tiles.
2. Uber in turn IP blocks EC2, preventing me from using my main VPN while in app.
3. Entities on the map are shifted by the GCJ-02 offset (https://en.wikipedia.org/wiki/Restrictions_on_geographic_dat...), meaning entities on the map are shifted by 0.5 miles (look at those cars driving on parkland: https://www.dropbox.com/s/hhkrjyka5uq0pfb/PeopleUber.png?dl=...)
4. User support was absolutely non-existent. After I responded to an automatic email from the local community manager inviting me to ask any questions, I only received an automated emails telling me I won't be helped.
5. Help pages in the app on Uber China tell me to see the Chinese translation, with no actual link to said translation.
While the foreigner use-case in China is niche, the sheer amount of obvious (and easily resolvable) problems I ran into suggests that Uber has organizational problems ensuring both drivers and customers have good experiences in foreign countries.
One blog from Jan 2014 highlights how bad the execution was at launch: https://www.larrysalibra.com/5-problems-with-uber-in-china-a... - the most absurd being that Uber (at that time) only accepted US-branded credit cards which few Chinese nationals hold.
What we find most annoying that I always set pick up as an intersection of two streets (fuxing/wulumuqi but in Chinese) and then stand on the corner and yet they always call to ask where we are. We are on the f*cking corner I entered and we do not speak Chinese very well so a mumbling guy does not work well. They stopped allowing you to send sms to the driver, like you can in other countries which would allow to send google offline translated details... so often they just cancel the ride because we cannot explain. Uber Black still do their best so usually that is the easiest.
Last year things were definitely easier. Drivers were doing their best more for foreigners, you could sms and they would not call before, they would just pick you up.
A big pet peeve is with Google and maybe someone here knows how to fix it; I use Google Translate with offline translations but when you are online, even though Google cannot be reached, it will try to do it online. It is beyond annoying when you quickly want to translate something, you have offline installed and yet it will just hang trying to reach the mothership...
Edit: now that I have access to Google to search for my Translate issue, I will give Netguard a go.
Great point on the driver calling being an issue for non-Mandarin speakers. I also experienced this. I actually asked drivers why they do this and apparently riders seem to put incorrect location information in -- this in itself indicates there is some problem.
Regardless, I don't begrudge Uber much here; the driver call culture is hard to fix (even in America, I'm called sometimes) and it's not unreasonable to require your customer base speak the local language. (It is unreasonable though for the phone app to assume your locale matches the local language [help screen problem] or to assume that you've downloaded the app from a completely local source [Google maps source issue])
But this is what I mean as an example of an easily fixable problem. If user is using the Play Store app, show a dialog or otherwise redirect them to another source. Even a simple help menu telling you about the problem and how to fix it is low-cost.
Those cheap fares are artificially low, funded by SV money and ignoring regulatory issues. But money does run out (or investors want a real return eventually), and regulators either change the law (nullifying their advantage) or crackdown completely.
Uber's network effects are almost non-existant. Every small geographic market has to be fought and won the hard, and expensive way. And when the money runs out and the fares go up, there is no market lock-in. Barriers to entry are low, potential competitors include anyone with a car, Uber just doesn't have a way to lock in market dominance.
Which is probably why they're rushing toward driverless vehicles as fast as they possibly can. Their own staff are an existential threat so they have to remove them as soon as possible. Except that puts them in direct competition with a whole range of extremely well funded, and well connected industry players.
So. Good luck Uber, this is just an example writ large of where Uber is heading in the not to distant future.
In general, I think most nations should have more closed door policies like China. My country (which won't be named) does not have a startup ecosystem anymore and we have become a consumption ground for one silicon valley startup after another. Instead of fostering local startups and paying some money (since many bootstrap and do not have big pockets), all the companies just take the freebies of silicon valley startups. We had a local chat start up but slack ate their lunch. Everyone here just uses the slack free tier. How do you compete against free?
Eventually, this has led to all the data of individuals and companies on US soil (or wherever those startups feel like stashing the data). We have no control or say over it. If we are to look for alternatives, there is none in our own country.
And for those who think the world is one giant land where everyone can roam freely, it's impossible for me to move to any of the western world because of visa restrictions. And US has the harshest work visas on the plante.
The point of division of labor (aka how civilization got built) is that it's not _necessary_ to spend time re-doing the same thing others are doing. Slack is giving you something for free that you don't _have_ to spend time or money building now.
Now you have X engineers free to work on something actually innovative, not just a clone of X, and getting a cheap/free service from slack.
The point of economic policy should not be to produce pointless jobs.
US had a head start on development, which means these two factions didn't have a level playing ground to compete for a piece of the pie. Therefore China must protect to get back on level playing ground.
So either you think that there really should be one company per thing (for whatever definition of thing), in which case that's a whole 'nother ballgame, or your theory is logically inconsistent.
You launch and are trying to grow your business.
Then Slack shows up and is giving away a similar product because they have VC money to burn. How do you compete?
Cheers to these guys for making it work in China. And Good luck to Uber fighting strengthening competition all around the world.
Because those engineers and entrepreneurs could have spent their time producing something globally new and innovative instead of creating an Uber clone. Then they could have sold that new thing to the world and everyone (global consumers and the aforementioned Chinese) would be better off than the status quo.
Actually, the more plausible arguments against protectionism and state aid for favoured corporations are the precise opposite to the one you're making: it's good for consumers to have a wider choice of ride-booking apps, and not a choice guided by the government. If the ridesharing apps are likely to tend towards being a monopoly anyway then there certainly are advantages to having it a locally owned and run one.
Should Xiaomi be artificially blocked from selling smart phones in the US? Should all Huawei products be blocked? Should the policy of the US Government be to directly assist Apple versus Samsung (or any other competitor) in the US market? Should the US begin directly subsidizing immense steel production, using the US Dollar reserve currency to intentionally bankrupt China's steel producers via Fed printing to pay for it all? To what extent should the US be using the US Dollar to destroy foreign corporations to gain a competitive advantage? Or better yet, using the NSA to do so. How far should protectionism go?
Should the US use the dollar to start massive state enterprises, printing dollars to pay for it all, to buy up foreign corporations. For example, maybe the US should create a massive potash conglomerate from a state owned enterprise backed by the Fed directly. Then use some USD printing to merge up with other big potash players around the world, and use political leverage and threats to force other nations into allowing those mergers. Japan for example has been buying up its own stock market, maybe the US should go a step further than that. If China wants to compete using big state owned enterprises, why shouldn't the US respond in kind, and then some? China also directly funds non-state owned enterprises through various banking channels. Maybe the Fed should be providing 0% interest loans to US corporations to advantage them to acquire specific major foreign competitors for essentially no cost.
Should the Fed provide Apple, Microsoft, Amazon, Google, etc. with a nearly unlimited budget to begin manufacturing all of their hardware & components in the US, along with perpetual subsidies to keep that production local? Might as well take advantage of available leverage.
If not, then why is it ok for China's government to set up intentional barriers to entry or to encourage rather drastic dumping policies in several big industries? Should foreign companies not be allowed to buy majority ownership positions in domestic US corporations? Should the US Government deny all attempts by foreign corporations to buy domestic corporations? Why is it considered ok for China to directly advantage and subsidize so many massive state enterprises, if the US and other nations aren't supposed to behave that way?
Should the US Government look the other way, while a major US entrepreneur steals tens of billions of dollars from a Chinese company, as Jack Ma did with Yahoo and AliPay? Is that the kind of protectionist playing field that is desirable?
Facebook, Twitter, Google and numerous other US companies have been directly blocked from competing in China in all sorts of ways. Which companies of China's should the US be blocking in response to that?
They just want to release an app that harvests money from Chinese consumers.
So if China can protect a local company that will clone uber, but with the difference of investing in local human capital and infrastructure, why not take that opportunity?
Dumping their product below-cost?
