Is avoiding regulation the best way to fast track startup ecosystem growth?
A few weeks ago, I ordered a taxi from AMAP early morning in Xiamen. The driver took me to a route I am not familiar with so I checked the route on the app and asked why he was not taking the main road of the city. The driver responded by calling me a SHABI (Douche). I decided to report the driver to the authorities for not taking me to the destination. After calls and calls with different authorities, it turns out the driver was not registered as a taxi driver even though the app told me the it was; in retrospect, it seems scarier as I can be dumped on the road anywhere or simply get on a car with a stranger as a driver.
The incident reminded me of a similar incident in the Netherlands where I was called Chinese trash by a deliveroo driver.
I read in Didi’s IPO application that the company did not obtain permits to operate in all the cities it has businesses in and not all drivers on the platform have the permit to drive a taxi as well. In order to develop business and obtain customers as soon as possible (they went from a startup to IPO in 8 years), the company ignored some of the rules and decided to operate. The safety issue implied for passengers are there; four passengers were murdered by drivers with criminal records from 2018 to 2020. The drivers were not vetted, do not have license to operate as taxi and even do not know how to pick up passengers at designated locations.
In the shared economy, it has become easier to get a business started and an ecosystem developed. It does not mean the tech companies are doing their business ethically. They won’t without regulation. We see Deliveroo, DIDI, AMAP all went public without going through scrutiny and I am glad to see that regulators are starting to realize they made a mistake by allowing these platforms to become monsters.