SHANGHAI — After more than a decade of building roads, high-speed railways, and skyscrapers, Yang Tian left his job in construction last year for what he hoped would be a less grueling role as a ride-sharing driver in Shanghai.

But just months into the new gig, Yang was working relentless 14-hour shifts for monthly savings of around 3,500 yuan ($480) — just marginally higher than from his previous job. Competing against a swarm of similarly desperate drivers and burdened by a 20,000 yuan deposit, Yang tells Sixth Tone he plans to quit as soon as the vehicle’s lease agreement expires.

“It’s the most tiring job I’ve ever done,” says the 31-year-old former construction worker from the southwestern Guizhou province. “I won’t ever choose to do it again.”

In China’s $63 billion ride-hailing market — the largest in the world — Yang’s struggle with diminishing returns amid increased competition highlights a broader industry paradox: Despite a surge in driver permits, user growth is stalling.

Government data reveals ride-hailing driver permits rose from 3.95 million in 2021 to approximately 6.57 million by the end of 2023. And a report from investment firm Cyanhill Capital found that more than 20,000 new drivers registered each day in 2023 — a six-fold increase compared to the previous year.

However, according to the China Internet Network Information Center, the sector saw a net loss of 16 million ride-hailing app users in 2022, though the total number of registered users still increased slightly from 453 million to 528 million between 2021 and 2023.

Seven drivers Sixth Tone interviewed over the last six months echoed Yang’s frustrations, painting a picture of an oversaturated market driving up competition and driving down earnings. And increasingly demanding platform policies compel them to work longer hours for basic income, often at the cost of their physical and mental well-being.

In response, the government has implemented stricter regulations to stabilize the market and improve conditions for existing drivers. These include increasing oversight on licensing, reducing commission fees platforms charge drivers, and curbing the number of new driver registrations.

Experts highlight that while the new government regulations are a step in the right direction, more is needed to address the underlying issues in the ride-hailing industry. They advocate for a more comprehensive approach that includes enhanced support for drivers and adjustments to pricing structures to ensure fair compensation.

More wolves, less meat

Underscoring that the average driver now receives fewer than 10 orders per day, cities including Jinan, Wenzhou, Dongguan, Shenzhen, and Chongqing have recently issued warnings to potential new drivers about the oversaturated market. Some cities, such as Sanya and Changsha, have even halted issuing new driver permits.

In Shanghai, where the taxi fleet, including ride-hailing and traditional cabs, ballooned to 110,000 units by June last year — well above the 88,000 projected for 2025 — the government took more drastic action.

It ceased granting new driver permits last July and mandated that Didi, China’s ride-hailing giant with over 70% of the market’s share, remove 25,000 unlicensed vehicles from its service by the end of September. The move sought to realign supply with actual demand and enhance oversight. 

“The market is flooded with drivers,” says Yang, who’s felt the impact firsthand. Like dozens of others, he says that there were occasions when he received no orders for hours. A screenshot he shared with Sixth Tone from last September showed that while 265 ride-hailing vehicles waited around the Hongqiao Bus Station in the western part of the city, only 63 riders sought services within a five-minute span.

Another screenshot, this one from Shanghai’s Pudong International Airport the same month, showed an even starker disparity: 868 vehicles competed for just 39 passengers. “Getting even one order feels like amazing luck,” he says.

Last August, he spent four hours at the airport without receiving a single fare, ultimately driving away with an empty car and 80 yuan poorer from parking fees — nearly a fifth of his typical daily earnings.

“While the meat is little, the wolves are many,” says Han Cheng, another driver in Shanghai.

Han’s daily earnings have sharply dipped too, from 900 yuan late last year to just around 700 yuan now. “It means that despite working around 14 hours a day and six days a week, my monthly profits have dwindled to about 7,000 yuan,” he says.

Originally earning up to 18,000 yuan a month, Han now faces steeper operating costs, including a monthly payment of 6,000 yuan for his electric car, 1,500 yuan for battery charging, and 3,000 yuan for living expenses. Additional expenses such as car insurance and fines for traffic violations further eat into his income.

“In the end, there’s little left,” he says. “I have to support my family since I am the only one working.”

Zhu Wei, an expert at the Sharing Economy Working Commission of the Internet Society of China, tells Sixth Tone that the early influx of massive capital into the ride-sharing industry created an illusion of prosperity.

“Beyond the growing number of competitors, the reduced subsidies from the platforms have intensified financial pressures for drivers,” he says, adding that as the economy slows, demand for ride-sharing services has weakened. “Mobility is not an essential service. When incomes fall, people are more inclined to use the metro and other public transportation to save money.”

Discount dilemma

Across China, the ride-hailing landscape is not only experiencing a surge in the number of drivers but also in the platforms themselves: From around 100 platforms in 2019 to at least 339 today, as per Ministry of Transport data. Holding about 70% of the market, Didi outpaces competitors like Caocao Chuxing, T3, Xiangdao Chuxing, and EVGeek.

Amid increased competition, major platforms rolled out low-price incentives such as “one-off price” or “special price” features, which offer rides at fixed rates that are 10% to 40% cheaper than regular fares, according to domestic media reports.

While platforms claim that such features will boost income during off-peak hours, many drivers believe these policies exploit their efforts and reduce their earnings. “The price of a regular order is already very low,” says Han, who’s disabled the feature due to its impact on revenues.

Another driver, who asked to be identified only by his surname Xia, also admits that he doesn’t accept orders at discounted fares. “Once you accept a fixed price, the platform assumes you are willing to accept that rate, potentially blocking more lucrative orders,” he claims.

However, Xia warns that not all drivers can afford to refuse these fares. “For many who lease their cars, this isn’t an option because they need to keep earning to cover costs,” he explains.

In August, the policy triggered widespread debate after an appeal from a veteran driver in the eastern city of Hangzhou went viral on social media. The driver claimed that fixed-price orders disrupted the market and increased traffic accident risks by incentivizing faster driving.

And in December, another driver in Shijiazhuang in northern China criticized his platform’s low pricing directly to a passenger, who caught it on camera. The viral video led to his suspension, with the platform stating that while such orders result in lower earnings, drivers are compensated through other subsidy programs.

According to Zhu, such features fail to account for variables like traffic jams, placing financial burdens solely on drivers while riders and platforms bear no risk. Despite this, he acknowledges the policy’s validity since it aligns with consumer demand amid decreasing spending power. “It should be adjusted to be more humanized,” he suggests.

Over the past few months, cities like Shanghai, Hefei, and Shijiazhuang ordered platforms to reign in “one-off price” orders or face scrutiny. In response, Didi revised its policy on Jan. 30, allowing “special price” orders to be recalculated based on actual time and distance, and that drivers could choose whether or not to accept these rides.

Amid the wave of new regulations, ride-sharing companies have also intensified efforts to reduce operational costs. Some are partnering with automakers to develop specialized vehicles that are more energy-efficient and specifically tailored for ride-sharing services. There’s also growing interest in autonomous driving. Didi, for example, unveiled its first prototype robotaxi last year with plans to launch the service by 2025.

While the ride-hailing platform Xiangdao Chuxing declined to comment, Didi, Caocao Chuxing, and T3 did not respond to Sixth Tone’s request for interviews.

Heavy toll

Such is the intense competition that all the drivers Sixth Tone interviewed said they worked over 12 hours daily — well beyond the eight-hour standard prescribed by labor laws — with some driving for up to 18 hours at a stretch.

Official statistics from Guangzhou, capital of the southern Guangdong province, reflect this grim reality. There, the average daily driving distance increased from 121.26 kilometers in the second half of 2021 to 129.5 kilometers in the first half of 2023, while daily revenue dropped from 419.42 yuan to 395.6 yuan.

“You think of the rent when you open your eyes and how much you end up earning when you close your eyes,” says Xu, a driver from the central Henan province, who now works in Shanghai and requested to be identified only by his surname.

But the challenges extend beyond financial strains. After five years in the profession, Xu has gained over 25 kilograms and developed several health issues, including hypertension and a slipped disc.

Across the country, Xu isn’t alone. In 2023, a survey by the popular ride-hailing platform Xiangdao Chuxing revealed that about 75% of drivers work more than 10 hours a day, while only 4% work less than six hours.

The survey also found that over half of the drivers suffer from chronic fatigue, with increased health risks due to reliance on coffee, strong tea, or cigarettes to maintain focus. About 40% of drivers reported experiencing neck pains, and many others face issues such as obesity and lumbar disc protrusion.

Despite the health risks, working longer is the only way to prevent losses and earn a decent income, particularly for new drivers like himself, rues Yang. Without any days off, he gets only five hours of sleep per night, often napping in his car if he’s too far from his apartment after completing his last drop at midnight.

Eminjan Shawuti, another driver in Shanghai and hailing from the northwestern Xinjiang Uyghur Autonomous Region, feels compelled to maximize hours on the road to hit minimal earning targets: Completing more than 30 orders a day earns him an additional bonus.

“But it’s almost impossible to meet this bonus requirement in the current market. I would need to work several hours more than my current 13-hour schedule,” he says. According to him, while such bonuses earlier netted around 150 yuan, they have been slashed to between 60 and 80 yuan since October.

Shawuti, who moved from ship manufacturing to ride-sharing to earn more, describes the job as intense, forcing him to take shorter meal breaks to fit in more rides during peak hours.

Amid the growing concerns over the economic, health, and safety risks ride-hailing drivers are grappling with, government authorities have introduced a series of regulatory measures aimed at controlling the chaos.

Last July, the Ministry of Transport mandated stricter enforcement against unlicensed drivers and vehicles, which was escalated to a 100-day national campaign in September targeting illegal operations.

Last year, the Ministry of Transport introduced a plan to reduce the commission fees charged by ride-sharing platforms, with rates decreasing between 1% and 3%. And in an action plan announced earlier this month, the Ministry directed local authorities to work with platforms to ensure the sustained impact of lower commission rates.

Cities like Wuhan have intensified efforts, completing inspections that led to the removal of over 6,000 vehicles and significant fines for noncompliance. Regulations have also been adjusted to ensure platforms adhere to pricing policies, particularly for “one-off price” orders.

And in response to concerns about labor practices, in February, the Ministry of Human Resources and Social Security released detailed guidelines ensuring that ride-hailing drivers and delivery workers’ salaries meet local minimum wage standards and that they receive sufficient off-hours. The guidelines also require transparency in how orders and payments are distributed.

Zhu Wei from the sharing economy commission emphasized the need for regulators to tighten control of the ride-hailing sector to better protect the interests of both drivers and riders.

However, he believes in a more flexible regulatory approach. “For example, it makes sense to require full-time drivers to apply for operational permits for their vehicles, but should this also apply to part-time drivers?” Zhu asked, pointing out the potential for overly simplistic policies to disrupt livelihoods.

Yang Xiaoguang, director at the Research Center of Intelligent Transport System at Tongji University in Shanghai, suggests enhancing the policymaking process with better research and data analysis.

“The scale of urban ride-hailing services must be reasonable, and it should be based on a system where public transportation is the mainstay,” says Yang. “The ride-sharing industry should not be seen as a solution to employment issues.”

Yet, according to drivers Sixth Tone interviewed, the recent government measures have scarcely softened their hardships. Shawuti says that despite policy changes, his daily income has decreased from about 700 yuan in September to merely 500 to 600 yuan now.

Driver Han considered moving back to the eastern Jiangsu province from Shanghai to be closer to his family but decided against it after realizing that job prospects there were even bleaker, both in ride-hailing and his former role in electronics manufacturing.

Asked about which gig is better, Han finds it hard to compare the two, as each is exhausting in its own right. He says, “One makes you feel like a machine, the other a zombie.”

Contributions: Jiang Zu’er; editor: Apurva.

(Header image: An exhausted driver naps in his car while waiting for a new customer, Shanghai, 2015. Emmanuelle Firman/VCG)