Didi's “collapse”: Not recovering overnight, is cost reduction and efficiency a curse?

Sina Finance ·  11/28/2023 12:27

Since last night, the Didi App crashed and became unusable, drawing attention. As of press time, related services had not been fully restored.

This has also given other competitors a mobile conference. Many netizens said they are starting to switch to ride-hailing platforms such as Gaode, Meituan, and Hello. Hello Ride's official WeChat also appeared on WeChat to publicly compete for users.

As for the specific cause of the failure, some media broke the news that the Didi system was attacked, and that business sectors such as ride-hailing and bike sharing all went down, indicating that the problem was with lower-level infrastructure. There are also people in the industry who believe that the frequent downtimes of the core business of Internet companies are one of the accessories to reduce costs and increase efficiency. While Didi achieved revenue growth in the third quarter of this year, adjusted EBITA lost 300 million yuan, yet to achieve profit.

 What is the reason why you haven't fully recovered even after falling apart overnight?

On the evening of November 27, users from many parts of the country reported online that the Didi App had situations such as not being able to request a ride and not being able to load maps, etc. #滴滴崩了 #的话题也登上微博热搜。 Some users discovered that Didi's official website wasn't even displayed properly for a while.

In response to this on the evening of the same day, Didi Chuxing said on its official WeChat, “I'm very sorry. Due to a system failure, the Didi App service was abnormal this evening. It has been repaired urgently by technical students, and is currently being restored one after another. We apologize once again for the inconvenience caused to our users and chauffeurs.”

On the morning of the 28th, Didi once again stated on official WeChat that after an overnight repair by the technical team, Didi's online car-hailing and other services had been resumed, and users can download the Didi App to use taxi services. Services such as cycling are still being repaired one after another, and all unlocked or unlocked green orange cars can ride for free.

What is embarrassing, however, is that many users have reported that the Didi App service has not been fully restored, and there are still situations where Didi Chuxing cannot be used in Shanghai and Beijing. When some users have tried to use Didi Chuxing to call online car-hailing many times, a “network loading error” prompt screen popped up, and the location was inaccurate.

“It's been more than ten hours, and I haven't been able to get the system back online. I trust you so much. I doubt that my phone has a problem, and I haven't thought about your system. Dude, I've been standing outside for half an hour without a car. The green orange made me late.”

“How many people are late today to deduct their wages, and so many people have lost their full time because of this. Will Didi have to pay for full attendance?” Many users complained on Weibo.

Currently #滴滴打车 can't call #、 #青桔, causing me to be late #、 #滴滴网约车等服务已恢复 #、 #滴滴崩了 #多个话题词仍在微博热搜之上。

It is worth noting that when the Didi App service was unusable, many users said they had begun to switch to other ride-hailing apps. “Very speechless. Didi fell apart early in the morning. Fortunately, I just used Meituan and wasn't late”, “I said I couldn't get a bus in the morning; I still had to help Gaode.”

Hello Ride's official WeChat also showed up to compete for users. It said, “I swiped through my circle of friends early in the morning and saw that everyone was complaining about not getting a call. On such a cold day, who knows the pain of never being able to call a car... or try Hello Ride and call a car at the same time? More than 30 million car owners have joined. Request a ride quickly, so you don't have to worry and save money!”

As for the specific cause of the failure, some news broke that the Didi system was attacked in the middle of the night. According to media reports, some senior IT technicians have analyzed that, judging from performance, taxi rides and bike sharing are all on, and there should be isolation between different business segments, indicating that the problem lies in lower infrastructure. “Attackers generally only have access to the application layer; infrastructure is inaccessible. It was either broken through by attackers, or the operation of one's own system was inadvertently interrupted. Even the former is considered a system flaw that can only be broken through.”

 Is cost reduction and efficiency to blame?

Regarding Didi's large-scale and prolonged failure, some people in the industry believe that cost reduction and efficiency may also be one of the reasons.

The source believes that the Internet company's core business is frequently down and is down for a long period of time, which is one of the ancillary products to reduce costs and increase efficiency. With less system investment, fewer maintenance resources, and more frequent programmer changes, there are more bugs.

As an example, there is generally redundancy in the upward phase of business. In order to meet orders that explode at any time, the upper limit of the load should not be too high during the upward phase, such as 70% during the normal period. If you encounter a small explosion, you don't need to worry about problems, which is enough to cope with the small peak; however, the logic during the downturn period is different. When the load is very high, it is enough to fight back. Although it may be uncomfortable to run into small spikes later, the overall load will drop over time.

It is true that Didi is currently also facing a certain amount of profit pressure.

Recently, Didi released its performance report for the third quarter of 2023 on its official website. Data show that in the third quarter, Didi achieved total revenue of 51.4 billion yuan, an increase of 25% over the previous year. At the same time as revenue was growing, Didi lost 300 million yuan in adjusted EBITA in the third quarter and did not achieve profit.

Similarly, in the second quarter of this year, Didi's total revenue was 48.8 billion yuan, up 52.6% year on year; however, the net loss attributable to common shareholders was 267 million yuan. In the first quarter of this year, Didi's revenue was 42,712 billion yuan, an increase of 19.1% over the same period last year, but there was still a net loss of 918 million yuan during the same period.

In the first three quarters of this year, Didi had a cumulative loss of 1,485 billion yuan.

Prior to that, Didi's 2022 earnings data showed that Didi achieved revenue of 14.8 billion yuan in 2022, down 19% from the previous year, and the net loss for that year was 23.8 billion yuan. According to financial information disclosed in Didi's previous prospectus, in 2018, 2019, and 2020, Didi's revenue was 135.3 billion yuan, 154.8 billion yuan, and 141.7 billion yuan respectively; net losses for the same period were 15 billion yuan, 9.7 billion yuan, and 10.6 billion yuan, respectively.

Since its inception, Didi has yet to achieve quarterly profits.

 “Map qualification” causes controversy

It is worth noting that Didi has recently been mired in a “map qualification” dispute.

Recently, the first China Surveying, Mapping and Geographic Information Conference was held, and reports about whether Didi Chuxing has map qualifications have gone viral. According to media reports, Didi Chuxing is suspected to have no “Class A surveying and mapping qualification certificate,” but it still provides services such as electronic map navigation, and is suspected of “operating without a license.”

An inquiry by Sina Technology found that it is displayed as a “Didi Map” in the Didi Chuxing App, and that the company provides navigation services to the outside world. Didi's customer service staff also said, “Currently, the navigation services used by Didi drivers are all Didi's own navigation systems, which can guarantee accurate information on road conditions.”

However, when I checked the national surveying and mapping qualification management information trial operation system, I was unable to find the relevant certificates of many of Didi's core companies. In comparison, companies such as Baidu Map, Gaode Map, and Four-dimensional Map can all check one or more Class A navigation or surveying related qualification certificates.

Regarding whether Didi has relevant qualifications and is suspected of operating an electronic map business without a license, Didi said in response to media inquiries, “It is not convenient to announce it to the public yet.”

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