How to use product thinking to look at the problem of Didi taxi being difficult and expensive?

User psychological expectations are a process that requires long-term operational guidance. In the future, I think the concept of low prices should not continue to be instilled. Users should feel that they can get a taxi with peace of mind and enjoy better travel services. This is the key to the long-term health of an online ride-hailing platform. Looking forward to a Didi that makes travel better.

Recently, the issue of difficulty and high cost of hailing a taxi has caused heated discussion on WeChat Moments, and many people have begun to criticize Didi. In fact, if you think about it carefully, it is the end of the year and drivers have gone home to celebrate the New Year. The supply side has decreased, while the demand side has not decreased at all. Naturally, the demand for taxis is difficult to be met as usual. According to market laws, it seems normal that it has become more difficult and more expensive to take a taxi.

From the user's point of view, it is correct to hope to get a taxi quickly and cheaply. However, as practitioners, in addition to complaining, it is worth thinking about the issue behind this. In essence, it is the imbalance between supply and demand on the platform that leads to higher matching costs. So can it be solved with product thinking?

1. Who are we comparing “difficult” and “expensive” to, and in what period?

We live in an era of experience economy, and are accustomed to describing the service experience we have with feelings. "Difficult" and "expensive" are both comparative adjectives. The concentrated appearance of such feelings during this period must be a contrast. "Difficult" means that it was easy in the past, but is becoming difficult now. "Expensive" means that the price was acceptable in the past, but is now unacceptable.

1. Compared with last year and this year, Didi

Looking back to this time last year, did anyone complain about Didi being expensive? I don't remember any of that, because at that time Didi was still competing with Uber China for market share. Although the discount coupons were not as strong as in the first one or two years, they still provided huge subsidies to users. Didi's price is still the same, but after being discounted by coupons, people feel that the low price they actually pay is the ride price, but in fact it is not. This is the great effect of coupons in O2O operations.

Was it difficult to get a Didi taxi at this time last year? I don't have any recollection of it. I remember chatting with a Didi Express driver in the car at the beginning of last year, and I learned that Didi has a policy for drivers that "if you complete a certain number of orders per month, you will get rewards." So at that time, the drivers of Didi Express had a strong motivation to still go out and drive during holidays.

Didi is still the same Didi, but the subsidy factor from the period of market expansion exists. It has always benefited the drivers and subsidized the passengers, making users feel that low prices are the norm.

2. Compared with taxis and Didi:

The success rate of hailing a taxi has always been low, and the phenomenon of drivers refusing to pick up passengers has always existed. However, Didi Express is cheaper than taxis and has a higher success rate, so users are willing to switch to express services.

The problem of difficulty in hailing a taxi has always existed before Didi came out. Even during peak hours, the price of Didi Express has been dynamically adjusted by 1.5 times and 2 times. Although the price is rising, the success rate of hailing a taxi is increasing. Imagine a scene on a rainy day. On one hand, taxi prices remain stable, but it is almost impossible to get a taxi. On the other hand, Didi Express dynamically adjusts some prices, but you can still get a taxi. As a user, what will you choose?

(The data is estimated and may have some errors)

2. Reasons behind the recent outbreak

Didi’s product director posted a data chart like this on Zhihu, which basically shows the reason for the recent imbalance between the supply and demand sides. That is the reduction in driver-side capacity and the continued increase in passenger demand.

The number of online drivers hit a clear low during the odd-even license plate restriction period when smog was severe at the end of last year. Because of the license plate number restrictions, drivers were unable to come out to take orders. However, there was a small peak in call orders during those days, which is easy to understand. Those people who originally drove themselves could only take taxis due to license plate restrictions, resulting in a decrease in supply and a surge in demand, causing an imbalance in order matching.

In addition, since January 10, the supply on the driver side has continued to decline, while the demand on the passenger side has continued to increase, which has caused recent dissatisfaction and complaints from users.

Based on the data provided by Didi and based on experience, the recent problems of difficulty and high cost of hailing a taxi are fundamentally caused by the following three reasons:

(1) As the Spring Festival approaches, drivers from other places return home to celebrate the New Year.

If you are an in-depth Didi user, you will find that in the past year, many Didi Express cars in Beijing have license plates from other places, such as Hebei, Henan and other places.

(2) The tightening of online car-hailing policies has weakened the supply side in the long term

The legalization of private cars was followed by the introduction of new policies for online ride-hailing services in various places, the main measure of which was to restrict the household registration of online ride-hailing drivers. Taking Shanghai as an example, among the more than 410,000 drivers registered with Didi, only less than 10,000 drivers have Shanghai household registration. First-tier cities are the main battlefield for online ride-hailing services. I would like to ask how many car owners with Beijing or Shanghai household registration are willing to drive for Didi?

(3) As the temperature drops, more people are taking taxis

Users have a flexible demand for travel. If the weather is good and they are not in a hurry, they can just take the bus or subway to travel. However, in the cold winter months, especially recently when the temperature continues to drop, some users who could originally take public transportation also want to go out and take a taxi, which is the reason for the continued growth on the demand side.

3. The human paradox and real needs behind Didi’s dilemma

These two days I saw a commentary article titled "Why Chinese people really don't deserve better taxi services", which mentioned that the ideas of the majority determine the direction of society. In a fair competition environment, more abundant supply will only make goods and services more affordable. However, the distorted policies and controls on online ride-hailing services, especially the suppression on the supply side, will cause the market to return to an unbalanced state.

Taxis and private cars are merely a supplementary form of public transportation, not a solution for everyone's travel. Just like trains and planes in cross-city transportation, trains, as a means of transportation regulated by the state, are the main travel solution during the Spring Festival travel rush, but planes are not. Therefore, even during the peak period of Spring Festival travel, train fares will not increase, but airlines that normally offer discounts will almost always offer original prices during the Spring Festival travel period.

When enjoying low prices and subsidies, you should have thought that this is not the norm. If it becomes the norm, this company will not survive long because it does not conform to normal market logic.

If we return to the taxi-hailing model before Didi came out, how many people would be willing to do so? I think many people have had the experience of hailing a taxi on the roadside and waiting for a long time but still not getting one, and there was also the experience of refusal to pick up passengers on a large scale.

Thinking from the perspective of product thinking, what do users really want? Is it the low price or the availability of a taxi? I think the first thing is that you can get a taxi. This is the fundamental reason why online ride-hailing services have subverted the traditional taxi model. The low price is just a catalyst that encourages users to use it.

Therefore, for the Didi platform, the most important goal must be to increase the success rate of car-hailing matches, stabilize the supply side, reduce the idle rate of drivers, and improve the matching efficiency between the demand side and the supply side. Dynamic price adjustment conforms to the market logic of matching supply and demand. Any imbalance on either end of the scale will greatly reduce the matching efficiency.

Of course, in addition to matchmaking efficiency, we must also address users' fairness needs and match high-quality demands with high-quality services, that is, establish a membership system on both the driver and passenger ends. At present, Didi has established a service points system on the driver side, which is the first step. In the future, it should also establish a tiered membership system on the passenger side to allow passengers with high loyalty and good behavior to get a taxi faster and more economically. This is the only way for a platform to develop healthily in the long run.

4. From the product perspective, how do other O2O e-commerce platforms handle price adjustments?

The issue of price adjustment has occurred on many O2O platforms and e-commerce platforms. Why do Didi users react so strongly to this?

1. Meituan Takeaway

The initial operating models of Meituan Waimai and Didi are very similar, that is, to attract users to continue using the service in the form of red envelopes and coupon subsidies, gradually reduce subsidies after the business becomes stable, and charge users additional delivery fees. Why can Meituan Waimai users accept this?

Takeout itself is a product with a relatively low average order value, with an average price of around 30 yuan. Many users are attracted to takeout through coupons and are willing to go downstairs to eat in the store. The added delivery fee is a fixed amount, so users will naturally consider the delivery fee when ordering food and have a stable psychological expectation. What is a little different from Didi is that takeout is not an urgent need. If you think it is too expensive, then just don’t order takeout. However, Didi’s scenarios are somewhat special. For example, on rainy days, when the subway stops operating, taking a taxi becomes an urgent need, and the psychological expectations are naturally higher.

2. JD.com

Also at the end of last year, JD.com quietly raised the threshold for free shipping. Originally, it was 79 yuan, but this time it was raised to 99 yuan. However, users accepted it and there was no large-scale protest.

For orders exceeding 50 yuan, the psychological difference between 79 yuan and 99 yuan is not that big. It is nothing more than buying one more daily necessities. Compared with paying an extra 6 yuan in shipping fees, buying an extra 20 yuan worth of goods also feels like a profit to users.

The above two cases teach Didi that it is important to guide users’ psychological expectations, let them calculate the costs and benefits themselves, and make them feel that they are still making money, so as to avoid resistance.

5. Product suggestions for Didi regarding dynamic pricing

Now users' emotions towards Didi are mainly focused on Didi's dynamic pricing. There are few vehicles around, so Didi increases prices to give drivers more incentives to support supply. As the beneficiary, drivers naturally hope to earn as much as possible, so they often complain together with passengers, causing public opinion to believe that Didi is unscrupulous. In fact, both parties are beneficiaries of the Didi platform.

As for Didi’s core strategy, there is currently a lack of guidance on users’ psychological expectations, so it is necessary to allow users to make rational judgments when they are anxious about not being able to get a taxi.

For example, on the user side, when the price is adjusted dynamically, the information on available taxis and other modes of transportation such as ride-sharing in the surrounding area is provided at the same time, giving users more options to refer to and ultimately making the choice that best suits their own interests, rather than leaving users with only two options when the price is increased: "choose to accept the price increase" or "choose not to get a taxi", which is the crux of triggering user emotions.

Would it be better if you added the following content to the prompt text :

• There are XX idle taxis nearby, with an estimated price of XX yuan. (Let users compare the increased price with the taxi price, so as to adjust their psychological expectations of the price increase behavior)
• You can book a rideshare. There are XX cars nearby that are more compatible with your itinerary. (Provide users with suggestions for other travel options)
• The driver was charged an additional XX yuan for this order. (Let users understand that the price increase is to give drivers more motivation to accept orders)

When a car has already been caught, although Didi has given an estimate of "getting in the car in X minutes" on the product homepage, it is recommended that it be displayed more prominently to give users more feedback and guidance to alleviate their anxiety.

User psychological expectations are a process that requires long-term operational guidance. Didi’s long-term operational strategy in the past was to make users feel that it was cheap and they could get a taxi quickly. In the future, I think the concept of low prices should not continue to be instilled. Making users feel that they can get a taxi with peace of mind and enjoy better travel services is the key to the long-term health of an online ride-hailing platform. Looking forward to a Didi that makes travel better.

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The author of this article @白崎 is compiled and published by (Qinggua Media). Please indicate the author information and source when reprinting!