Uber competitor DiDi's new reward system has slashed pay rates for Australian drivers, forcing them to work punishing hours and battle it out for limited jobs
- One of Uber’s biggest competitors in Australia, DiDi, is losing drivers after it introduced a new payment and loyalty system.
- Under the ‘DiDi Advance’ program, drivers pay higher commissions unless they complete 30 trips or more a week and meet other conditions. It also removes key features for new drivers and requires them to drive consistently to maintain any unlocked rewards.
- One driver told Business Insider Australia he was worried the new program would pressure drivers to drive when tired, saying it was “an accident waiting to happen”.
When rideshare app DiDi first arrived in Melbourne, it promised to be a genuine competitor to Uber.
After all, DiDi had managed to beat Uber in its native China, boasts 550 million users worldwide, and has courted investment from the likes of Apple. However, 18 months later and after a steady expansion across the country, many of its drivers are departing the app altogether after the company launched a new rewards system, which began charging casual drivers higher commissions on each ride they take unless they gain high-level status.
Drivers say the new loyalty system, called ‘DiDi Advance’, pressures them to take on more jobs, doesn’t allow them to take a sick day or holiday without dropping status and makes them work longer hours to keep their pay rate up. They allege new conditions breach their employment status as contractors, discriminate against casual workers, and exacerbate fatigue. One predicted it was an “accident waiting to happen”. Many drivers have told Business Insider Australia that collectively the grievances have forced them to quit the app altogether.
One online drivers’ group conducted a poll among its members with more than three in four saying they had “lost all interest in driving for DiDi and almost never go online” anymore. Those departures could, in turn, pose a major threat to the viability of the business, with some speculating that fewer available drivers may force frustrated customers to leave as well.
It’s no wonder says Ride Share Drivers’ Association of Australia (RSDAA) secretary Les Johnson.
“Drivers and riders had been supporting DiDi because they saw it as an alternative to the big bad elephant in the room, but now it’s turned around and done the dirty on them,” Johnson told Business Insider Australia. “I think when Advance happened, a lot of drivers started telling their passengers and they all started going back to Uber.”
What is DiDi Advance?
DiDi Advance is the new system by which all of its drivers are either rewarded or punished, depending on how many trips they complete, what proportion of jobs they accept and how many they cancel. Their weekly performance is rated at the end of each week, with their status setting their pay rate for the following seven days.
While it has been presented as a reward program, it represents a fundamental shift in how DiDi pays its drivers. Before the implementation of DiDi Advance, the company took a flat 5% commission on all fares drivers received. Since the introduction of Advance in December, the average Australian driver now pays a commission between 12 and 13%, DiDi confirmed to Business Insider Australia.
DiDi Advance has four tiers: Silver, Gold, Platinum and Diamond. The chart below lays out how each of the four tiers is calculated and the conditions of each, with each new driver forced to start at Silver rates from their first week.
To earn the same 5% commission earned before the program’s launch, a driver must be classed as ‘Platinum’. In order to reach and maintain that level, a driver must take 30 trips or more a week, complete 65% of all trips accepted, and accept 9 out of 10 rides offered by the app. If they fall below those targets, they face commission rates between 12% and 19%, significantly eating into their take-home pay.
Diamond status, the holy grail of the program, meanwhile has a 0% commission rate, which entitles drivers to take home their entire earnings for the week. To reach that lofty level, you must complete more than 80 trips every single week and accept 95% of all those DiDi offers them while online.
Any driver trying to reach or maintain that level can’t then afford to take a holiday or get sick as DiDi doesn’t currently allow its contractors to take time off without having to start at the bottom of the ladder again.
Uber also has a rewards program, Uber Pro — based on the driver’s rating and cancellation rate rather than volume of trips — which rewards drivers with perks such as petrol savings and free car washes but does not affect commissions.
Uber, for the record, has around a 28% commission rate but charges customers higher fees to ride compared to DiDi. This means drivers get a higher pay rate despite the high commission, according to the RSDAA.
“The problem is, DiDi offers cheaper rides than Uber so if they take similar commissions, DiDi drivers are getting paid much less,” rideshare driver Michael Gambino told Business Insider Australia.
The 35-year-old Melbourne-based driver had been driving 6 days a week for DiDi since it launched in 2018 but has quit the app entirely since it introduced Advance.
Gambino says that, combined with DiDi jobs being “few and far between”, the choice is clear for him.
“I don’t think anyone would work for DiDi alone unless they have been deplatformed by Uber,” he said.
Uber and its competitors are certainly not without issues, with an Australian study last year finding the rideshare business model relies on the underpayment of workers.
DiDi Advance is ‘an accident waiting to happen’
The draw of being a top-tier driver status is clear: it is the only opportunity rideshare drivers have to keep the entirety of their earnings. But just how hard is it to get to Diamond status?
One Diamond driver, who did not wish to be named for this article – but was put forward by DiDi’s PR team – said it normally took him five-and-a-half to six days to satisfy the company’s targets.
“You can absolutely do it but you’ve got to work hard and be smart,” the Melbourne-based driver and retired businessman said. “You’ve got to know where to go, know where you’re going to get rides, and be doing at least two trips an hour.”
By his measure, Diamond status requires over 40 hours of driving a week — more than a typical full-time workload.
Rideshare drivers protest outside NSW Parliament in October 2019 (Business Insider Australia, James Hennessy)
This fact has drivers like Ron, who asked to be identified only by his first name as he’s a current driver for DiDi, more than a little worried.
“I have major concerns about their fatigue management policy. All the platforms have them, but they do little,” the Queensland retiree and part-time driver told Business Insider Australia.
DiDi’s system allows drivers to work eight hours and then withholds jobs for a six-hour period, before allowing drivers to go for another eight hours. Uber allows 12 hours before an 8-hour freeze commences, while Ola has a similar policy. All policies far exceed the Australian guideline of no more than two hours driving, while doing nothing to prevent drivers simply switching between apps to bypass such safety measures entirely.
In theory, it means that DiDi drivers could drive between 7 am and 3 pm, take a break, head back out at 9pm and drive until the early hours of the morning. Just like Uber and Ola, there are also no preventive measures to stop drivers switching between platforms or working other jobs on the side.
While a DiDi spokesperson described its driver safety management as “comprehensive”, drivers like Ron aren’t convinced. He fears the Advance program, however, with its system of incentives and deterrents, is now going to push drivers even further.
“The Advance system encourages drivers to work longer hours to unlock the lowest commission,” he said. “There are many drivers out there desperate for money and many international [drivers] sending as much as they can back home. It’s an accident waiting to happen.”
DiDi Advance has cost some drivers up to half their income – unless they’re willing to drive significantly more hours
Perhaps the clearest ramification of the Advance program is that it penalises casual drivers, who have seen the commission they pay to DiDi more than double if they are classed as ‘Gold’ drivers and almost quadrupled if they do less than five rides a week.
In implementing the rewards program, DiDi appears to have distanced itself from the typical gig economy worker — one who works such jobs to supplement their income. Given there are 1.15 million underemployed Australians, the attraction of such work is self-evident.
Take retirees like Ron for instance, who says the changes have cost him up to half his income.
“Before Advance, I was generally earning in the region of $200 to $400 per week. With Advance, my loss of income is between $80 and $200 per month,” he said, noting he’s had to take on extra jobs just to make up the difference.
That too has its ramifications, as drivers take on greater strain just to maintain their income. If a driver takes a few days off or misses their week’s targets, they can quickly fall from DiDi’s graces.
“[If you] take a well-earned week off, [you’re] back paying the highest commissions,” driver Vince Rowbottom told Business Insider. “What a dumb move to retain drivers.”
Dumb, and also potentially dangerous.
DiDi maintains it has consulted with drivers, but has it?
DiDi, when presented with these complaints, stood by the new Advance system. The company said drivers indicated they preferred a rewards system, and DiDi Advance is what they’ve got.
“DiDi has been working closely with our driver community through surveys, feedback forums and our Driver Advisory Council (DAC), listening to what matters most to drivers,” DiDi spokesperson Dan Jordan told Business Insider Australia. “Based on this feedback, we developed DiDi Advance.”
Rideshare drivers strike in New York (Photo by Richard Levine, Corbis via Getty Images)
The RSDAA, which represents the interests of the workers, disagrees. It says DiDi has run roughshod over drivers and their interests.
“There was no consultation with RSDAA at all prior to the introduction of ‘Advance’, secretary Les Johnson told Business Insider Australia. “Committee members met with Didi management prior to them commencing operations in Queensland [and] they stated rates and commissions would remain at the start-up rates.”
That’s in spite of what Johnson and drivers say was originally an amicable relationship. Flush with generous referral bonuses, drivers went out of their way to support DiDi when it first arrived, welcoming another Uber competitor to Australia. Now it appears that relationship has largely soured, with Jonson saying DiDi has turned its back on drivers.
Case in point is its unique destination feature, which attracted many to work for the rideshare app. Before Advance, all drivers could see where customers wanted to go and judge whether they wanted the job. Now that’s been taken away for the lowest-tier.
“What I liked most about DiDi was showing the destination with the job request. Now that is gone there’s not a chance of me working for them again,” former DiDi driver Phil Rowley told Business Insider Australia.
Gambino agrees it is disappointing that DiDi would punish drivers by taking away these kinds of tools.
“Instead of these feature being offered as an incentive to drive, people are being deterred by having them taken away,” he said.
The bad blood seems to be taking a toll, as workers turn away from the platform. Speaking from Queensland, Johnson said he’d noticed a drop in the number of active drivers.
“DiDi was taking off quite well in Brisbane in the weeks leading up to the introduction of Advance, with plenty of drivers around who were able to earn reasonable money. Now all of a sudden in the area where I work you’d be lucky to see one car in the area. It’s pathetic.”
DiDi disputes these claims.
“We have seen very little change to driver supply. Rider supply has not been affected,” DiDi’s Jordan said. “We hope to continually develop and improve DiDi Advance, something made possible by continued feedback from our driver community.”
DiDi says its changes are about quality control
Overall, the company maintains Advance is raising the quality of drivers on the platform and improving the experience of riders.
“The introduction of DiDi Advance has seen an improvement in rider experience due to an increase in trip acceptance and reduction of cancellations, something we are thrilled to see,” Jordan said.
The push to improve the quality of its service is as much about the stick as it is about the carrot, drivers say. On 27 December, the app began freezing out driver accounts, which had a passenger rating below the city average.
That’s not all. Drivers who refused too many trips also are starting to be frozen out of the app.
“I got banned on DiDi for 24 hours because my acceptance rate fell below 45% and they’ve warned [me that] if my acceptance rate doesn’t improve they will ban me for 3 days,” driver Fadi El Cheikh said.
Given drivers are classified as contractors by rideshare companies, with fewer rights as a result, he argues these new rules go too far.
“As an independent contractor shouldn’t I be able to choose and pick my jobs without the fear of being banned, or am I an employee?” he said.
The future of DiDi in Australia
DiDi, for its part, wouldn’t admit there are problems with the Advance system. It did, however, reveal that updates were planned, although remains tight-lipped on what they will be.
“Our second stage of the program will include several key in-app features for drivers. Additionally, we are working with leading Australian businesses to offer discounts and promotions across fuel, car maintenance, tyres and insurance,” Jordan said.
The DiDi app. (Rafael Henrique, Getty Images)
A driver memo, provided to Business Insider Australia by a driver, also indicates top-tier drivers will soon be granted priority for lucrative airport pick-ups. The company also said it plans on allowing drivers to take some time off without penalty.
“Driver level protection will be launched in February. Eligible drivers who take a break, planned or unplanned, will not have their driving level unaffected for a defined period, allowing them to maintain their level when they return to the platform,” the memo stated.
DiDi would not, however, reveal how long drivers will be able to take off.
The long road to the top tier
Despite drivers saying they’re turning their back on the company, DiDi says Advance is here to stay, with the company saying it ensures “committed drivers” can increase their earnings.
The driver DiDi put forward agrees – estimating he now earns between 10 and 15% more than he did before Advance was implemented and he gained Diamond status.
“The fact I’m not paying any commission makes it worth the effort for me,” he said. “I’m used to working for myself so I treat this the same way.”
These full-time committed drivers are the ones DiDi is clearly looking to retain. As for part-time drivers, he claims they’re the ones pulling down rideshare services.
“Advance stops drivers from abusing the platform, cancelling rides, and wasting the time of riders,” he said. “That’s always going to be a good thing.”
But at what cost? Locked into a fierce battle with Uber, DiDi is trying to replicate its victory in China. Dealing with an entirely different market in Australia though, its current loyalty program risks repelling drivers, or worse, putting them and riders at risk.