How China’s economy restructures: one million former coal and steel workers driving for Didi Chuxing

Didi Chuxing, the ride-hailing company, is claiming to have given more than a million jobs to former heavy industry workers across China, according to new research from the firm.

Its study shows there are now 3.89 million full-time and part-time drivers from 17 heavy-industry provinces including Heilongjiang, Shanxi and Sichuan who work for the firm’s private car and chauffeur services.

Out of the drivers it employs who used to work in heavy industry, 530,000 came from those that are undergoing massive restructure, including the coal and steel sectors, the report said.

It claims the number represents 60.2 per cent of the Chinese government’s one-year re-employment target for heavy industry workers who have been made redundant, and 29.4 per cent of the five-year target.

Cheng Wei, Didi Chuxing’s chief executive, said in a statement to the Post that 15 million rides take place on Didi every day.

“As China undergoes sweeping economic restructuring, Didi is in a unique position to help drivers find flexible work opportunities and better livelihoods with the power of technology as we work together to create more sustainable cities,” he said.

In February, China announced it would lay off 1.8 million steel and coal workers in an effort to reduce industrial overcapacity in the sectors, although no time frame was given for the layoffs.

Xu Shaoshi, chairman of the National Development and Reform Commission, said in June that China aims to reduce steel production capacity by 45 million tonnes this year and cut coal output capacity by 280 million tonnes.

Chinese premier Li Keqiang said at the Summer Davos in Tianjin last month that governments and enterprises will take steps to help laid-off steel and coal workers find employment, with the central government allocating 100 billion yuan to such efforts.

Kitty Fok, managing director for research firm IDC China, said: “Internet platforms like Didi are able to provide job opportunities for blue-collar workers, which also helps to fulfil the government’s Internet Plus initiative.”

China’s Internet Plus initiative calls for traditional industries to better integrate big data, mobile internet, cloud computing and the internet of things into their operations.

“Private car drivers with Didi are given clear guidelines on the type of service they should provide, such as a bottle of water to passengers in every ride,” Fok said.

“This is also a type of training programme that gives heavy-industry workers new job opportunities in the service industry.

“Such internet and online-to-offline companies are not only innovative, they also provide more new opportunities in the market.”

Neil Wang, president for Frost & Sullivan in Greater China, said that internet companies and the online-to-offline industry are changing the employment landscape in China.

“The rapid development of internet companies has changed the business model in many industries, providing higher-income job opportunities for people who previously earned minimum wage,” Wang said, adding that in some cases jobs created by internet companies could pay better than in heavy industries.