Uber: Meteoric Growth In China, but at what price?
Jun. 26, 2015
Following the recent news about Uber's CEO leaked email revealing the company's growth in China, Tencent published a report showing that the reality behind the stunning figures might not be as rosy as one would expect.
Following the recent news about Uber's CEO leaked email revealing the company's growth in China, Tencent published a report showing that the reality behind the stunning figures might not be as rosy as one would expect. According to the report, Uber drivers in China are generating millions of fake rides to collect more driver subsidies from the company. The most widespread method is referred to as “Acupuncture” and only consists of a few simple steps.
First, the driver needs to buy an Uber driver account, which are sold online and available even on Taobao. Some of the sellers also provide guidelines to learn how to fake rides. Once the account is purchased, the driver needs a partner passenger to book the fake rides while making sure that the location service is switched off. Following that, the driver takes the empty ride and then pays back the ride fare to the passenger. At the end, the driver and the passenger are sharing the subsidy paid by Uber.
China monthly trips growth compared to the rest of the world.
The report from Tencent Tech states that more than 200 000 Uber driver accounts were sold only on Taobao, which is not even the biggest marketplace for them. Conservative estimates put the number of faked rides to around a million, while others think this number could be much higher. Nevertheless, Uber knows about the fake trips, but the company is in a difficult situation to take measures against it. Drivers creating fake rides are actually burning the investors money while not providing any actual service to any passengers. However, cutting down on the fake rides entirely, would badly affect Uber’s impressive China figures, which are an essential mean to convince investors for more funding.