Didi Chuxing Compensated 280 Million Yuan of Unpaid Ride Fares in 2020, Open Letter Reveals

In an open letter to its contracted drivers on Tuesday, Sun Shu, CEO of Didi’s ride-hailing branch and head of the Drivers Committee, addressed the platform’s carpooling commission rate policies and disclosed information about wage compensations.

According to Sun, the firm in 2020 covered 280 million yuan ($43.6 million) of unpaid ride fares and 237 million yuan ($37 million) of empty-carpool subsidies to its drivers – a total of over 500 million yuan ($78 million) in compensation.

The letter was addressed to the platform’s drivers in an attempt to enhance transparency and provide answers to confusion about commission rates, especially concerning the “carpool” function.

To the question of how commission rates differ under various carpooling scenarios, Sun explained that payments from customers are set at discounted prices depending on individual routes, while the driver’s share is mostly calculated by the distance of the entire carpooled ride.

The gap between the sum of passenger payments and drivers’ earnings can vary based on the efficiency of such rides, with commission rates usually higher for more efficient, short-distance rides. A subsidy is promised when the difference exceeds 30%.

When the carpool is unsuccessful, however, drivers receive an amount more than the single rider’s payment, because the discounted fixed price does not match regular billing standards. In this case, the platform pays an “empty-carpool” subsidy to drivers to make up for the difference.

According to Sun, one out of every five to six carpool rides belong to this category, in which the final commission rate is negative.

The letter also announced a new “no-commission” policy for morning rush-hour carpooling to encourage drivers to pursue more of such orders. From 7am to 10am every weekday, drivers now will receive the sum of all passenger payments in its entirety if the carpool is successful.

The policy has been tested in a trial run on June 14 in cities including Taiyuan, Nanjing, Yantai and Shaoxing. Didi has been advocating for more use of its carpool function as part of its efforts to achieve carbon neutrality.

The platform’s Drivers Committee was established in April in an attempt to push for a healthier and more sustainable community, as well as to protect drivers’ rights. Last month, Didi promised its drivers it would establish a new feature that could provide details about the full breakdown of earnings and commission from individual orders, in response to regulators’ accusations of unfair pricing and a lack of transparency. The feature will become available in July.

SEE ALSO: China’s Ride-Hailing King Didi Chuxing Files for Blockbuster US IPO, Revealing $30 Million Profit for Q1

The biggest ride-hailing platform in China, Didi Chuxing has filed for an IPO in April and is now planning its debut on the US stock market in July. With over 493 million active annual users, the company strives to continue its expansion and build its impact in both domestic and overseas markets.