The drop of a quick merge behind the refraction of

In the easy to use the car and drop a taxi that pile of Qidafei, not be optimistic about the gossip, drops and fast but happy knot knot, "sad" easy to immediately to the Ministry of Commerce to report, and indifferent to the Shenzhou car also did not send blessings, this paragraph comparable to the emotional entanglement of idol drama behind, What is refracted is the industry confusion and business anxiety that enterprises are hard to pour out to the media.

In the more than 10 days since the merger was announced, the media has read a lot about the future of the taxi car business, but it is often based on specific preset positions, and because of the lack of data support, there are many unfounded speculations. This paper is based on data and business logic to analyze the case.

Cross-examine one: Where is the sensitivity and subtlety of this transaction?

Many people initially felt shocked at the drop and quick merger news, because there are some normal business thinking difficult to explain the problem, in particular, and easy to use the car of the oolong gossip aggravating, and the truth of the complex is beyond the imagination of many people, this transaction is the essence of the Chinese-style corporate governance, investor business planning of the mixed product.

The first is, of course, the cost pressures of burning money. At the end of 2013, the peak of subsidies for the taxi war that's the key period for fast-maturing mobile payments, with 20 million of dollars a day's worth of subsidies, like Tencent and Ali, as fast as CEO Lu Zhunwei said were "unsustainable" in the first quarter of 2014. Tencent has basically stopped the drop of financial support, in the brutal competition in the rapid loss of blood quickly not only its founding group, the two sides of the financial investors also into an unprecedented embarrassment, merging is just a kind of instinctive self-help.

Another driver of the merger is the capital dimension. In the high-speed iterative capital model, the new round of financing has reached 700 million of dollars drop and quickly face the same problems as Uber: with their speed of burning money, and then want to expand through financing has been very difficult, high valuation itself is a double-edged sword, especially the existence of strong competition, the policy is not clear, Therefore, whether it is Uber or drip fast, it is bound to complete the IPO in 2015, if two companies continue to vicious competition, not in line with the interests of investors, but also to increase the risk of financing. Quick taxi once absorbed a hi car rental 25 million of dollars in investment, as a response, drops of Cheng Wei once had contact with the Shenzhou, the latter listed after the full purse, but because is brewing their own car brand-Shenzhou special cars, so the talks between the two went nowhere.

In fact, the drop and quick secret planning for the merger has been a few months, but in the founding team and the majority of investors to reach a consensus, the merger was a stubborn obstruction by Ali. Ali was tempted to exercise a veto over the deal, fearing that Tencent, which had more access to the micro-credit payments, had profited from the deal. So Weishing easy to use the car in due course, and in this transaction played a rather dramatic role, dripping through the release and easy to merge "insider News", in disguise to the pressure on Ali, at least from the results, the Chinese style of Machiavellian still quite successful, no reason into the Bureau of course will not cooperate, CEO Zhou Ai in the micro-letter all is "nonsense", and even launched a antitrust report to the Ministry of Commerce.

In corporate governance, drops and quick mergers use a rare CO-CEO two-dollar shared power structure, the explanation given by the new company is that it helps to avoid vicious competition, retains the good genes of two companies, and can still operate parallel and independently in the future, which is purely a naïve lie. The dualistic power system is unlikely to succeed in China in the past and in the future, even in ancient Greek Sparta, the two Kings system also has a clear division of Labor, the Republic of Rome Consul can have many people, although the power is very large, but a very short term, in a special period, the Senate will still nominate unlimited power "dick push More". China's entrepreneurial companies need not to discount the executive power, Co-ceo loose management can only be suicidal. Although the combination of drops and fast have repeatedly stressed that both sides of the management team will remain in office, but the fact that the Lu Zhunwei as the representative of the fast team will certainly exit, the new company's so-called rumor is more like to stabilize the morale of the white lie.

In this deal, Tencent and Ali first completed the role of conversion, their identity has been transformed from strategic investors into ordinary financial investment, although "two horses" in the first time to the new company blessing, but the company's important decision no longer enjoy the veto, which can let Cheng Wei no longer entangled in the two big gold lord of enmity, To operate independently, but to a large extent also means that the kind of transfusion support that once made the drop and the fast success of it will tend to weaken.

Second, the new company's control is well known to drop in the hands of the drip, but the whole transaction deliberately stay in the spotlight of the Liu and low-key cautious Cheng Wei, the future distribution of power and balance remains to be seen.

Cross-examine Two: How terrible is the droplet after the rapid merger?

On the surface, most people generally think that a drop and a fast merger will make China's travel market an unprecedented Big Mac, the new company's market share seems to confirm this, but the truth is not so simple. Although travel innovation is a hot topic in the technology circle, however, many of the internal situation of this line is still not known to outsiders, such as dripping, fast, easy to even Uber are not listed companies, and do not have the obligation to disclose their operating conditions and financial data, which also makes the outside of the float such as the smoke and mirrors, a lot of scratching itch.

First of all, Uber's situation is simply not sufficient for reference, because China and the United States are two distinct markets. 2013, Uber has been able to do 10.7 million of dollars in a day income, not to mention in the United States such a mature market, Uber can extract about 20% of the gross revenue as net revenues, against the domestic, because of the premature travel experience, the drops have to reverse copy Uber mode, first into the relatively mature taxi market, The opportunity to cut into the limousine service is too late, coupled with Tencent and Ali, so that vicious competition becomes the norm, and the abnormal business practices of burning money subsidies exist for a long time. Uber's mobile payment has been done with a credit card, only later to increase PayPal such a tripartite payment platform, and the drop and fast mainly rely on micro-letter and Alipay, passengers pay the driver's fare is difficult to be identified as drops and fast of the operating income, in two companies occupy a taxi market 99.8% share of the case , which is their confidence that they dare not bring the merger to the Ministry of Commerce.

We are here to disclose some information about this industry:

How much is the drop and the fast income? The exact figures are staggering, with two companies totaling just 25 million dollars in 2014, roughly the same as Uber's two-day income, if the horizontal comparison of car rental companies, such as the Shenzhou rental of the annual revenue of more than 600 million U.S. dollars, a much smaller a hi car rental also has 100 million dollars. There is no doubt that it would be ironic to discuss issues such as monopolies in the trickle and fast of this poor revenue scale. If only in the car business, the average number of orders per day in 680,000, drop a car slightly more than 8.1 million, of which the orders from Beijing accounted for about percent, but the system sent a single success rate of less than 40%, and most of it is by the inability to meet the taxi business import, the single average amount of money concentrated in 50- 80-yuan interval, taking November 2014 as an example, A car under the month of the total number of 232,000 people, including the addition of 188,000 members, the car business is now very dependent on the promotion of new passengers and taxi business diversion, due to the excessive competition subsidy, the next single user's retention rate is not ideal, 5 months after the retention rate of less than 40%.

The good news is that the average monthly order of the car users is increasing, the average monthly order volume of the individual users of a car is increasing continuously throughout the 2014 years, although the increase is not large, from January to 2.37 to December 3.75 single. Again from the payment method, the car is proved to be a high-frequency just need services, the specific performance is willing to bind credit cards and willing to recharge the user gradually increased, A number of car data is November 2014 to recharge the number of 14,000 people, recharge total amount of nearly 4 million, per capita recharge amount of nearly 300 yuan, this is also the Shenzhou car just on line, on the start of large-scale recharge rebate activities of the root cause.

However, the data also reflects the drop and fast private car as the core of the bus service there is a clear bottleneck, July 2014, the launch of a car, has been vigorously expanding the source of vehicles, this is the same as the practice of dropping cars, but the speed of expansion is far from satisfactory. By the end of 2014, there were only 400 vehicles in Beijing, national registration of the total number of drivers also not more than 15,000 people, in order to match the number of orders, you can approximate the average of each driver's daily volume of 5-7 single, compared to the quick taxi one months 35 million order volume, is bucket.

The data just confirms a basic fact drop and fast at the business level is far from people's imagination as successful, in the car this brand new market, they are just beginning, the daily average order volume is roughly equivalent to the use of cars, no advantage can be said, January 2015 on the line of the Shenzhou car orders have been approached this level. Future competition will be more focused on scale, after the integration of the drip will be exhausted all the way to high-quality users from the loss of the taxi business output to the limousine service, and the Shenzhou rental car will be the original short rental from the customer output to the Shenzhou limousine, this output and conversion process for several enterprises is a matter of Life-and-death.

Cross-examine Three: The competition pattern of the new car?

This year is decisive for all travel innovation companies, reliable news shows that Uber and drop-fast merged new companies will be IPO this year, but it turns out that taxi applications in China is unlikely to become an effective business model, taxis as part of public transport, has a special industry threshold and access mechanism , despite the growing clamour for reform and the strong support of public opinion, it is still a highly unrealistic business claim to profit from the market segment.

Drop and Fast Transition bus service is the general trend, however, there are policy and legal risks in the model, although two companies have repeatedly claimed 100% to cooperate with leasing companies, but in fact most of the small and medium-sized car rental companies are also dependent on private car, the qualification problem can not rely solely on the car rental company with a paper contract to resolve. Leasing licences, especially in the first-tier cities, are in the hands of large car rental companies such as the Shenzhou China has about 13,000 licences in Beijing, which helps to understand why a special car has been operating for half a year and still has only 400 vehicles in Beijing, while the Shenzhou special car, which is less than January, sits on more than 4,000 operating vehicles in Beijing. It is impossible to expect legal policy to open up private car operations in a short period of time, as there is no precedent in any country, and strong Uber in Europe and America have encountered unprecedented resistance.

Limousine service Another problem that must be solved is a loss, no normal business model can lie behind the innovation halo but experience endless losses, after the resignation of the strategic investors such as Tencent and Ali, the drip will have to seriously consider the issue of profitability, Their past pattern of creating massive cash flow but losing blood has come to an end.

To the early access to car services for example, in addition to the short time failed to operate a taxi, it has been focusing on the more lucrative limousine business, but still suffered a long time loss, and see no signs of reversal. Throughout the 2013, the average monthly loss of vehicles in the car is more than 2 million yuan, December single month loss even exceeded 10 million, the total loss of the year amounted to more than 58 million, 2014 average monthly loss is increased to more than 10 million yuan, The main reason is that the service cost is too high and unrestrained advertising, according to any normal business theory, such companies are difficult to maintain.

How to realize the profit on the car company is an important issue, especially when the company is facing the critical moment of the IPO, drop fast in the merger after the gradual stripping of taxi business to seek to stop bleeding is can be asserted, the original relying on Baidu car to provide access to the use of vehicles will be because of Baidu investment Uber In particular, the passive acting as a drip to the quick pressure tool, as for the AA rental company, because the size is too small for the moment has not discussed the value.

More favorable is the later Shenzhou special car, because of its main business of Shenzhou rental has been listed, and directed to the capital market to raise 500 million dollars for the expansion of the car business, money is not scarce, but also because of the use of its own vehicles to provide services, operating risk can be greatly diluted to focus on the service experience Of course, the industry also has a similar successor, such as the Spring Festival on the line of a hi pick-up. The 2015 car competition may present drop mode vs rental company posture.