Date
22 October 2017
About a dozen van drivers staged a protest in Kwun Tong on Friday morning, alleging that GoGo Van’s policies are hurting their income. Photo: SocREC
About a dozen van drivers staged a protest in Kwun Tong on Friday morning, alleging that GoGo Van’s policies are hurting their income. Photo: SocREC

Why some drivers hate GoGo Van

Not too long ago, GoGo Van, a local start-up that matches van drivers with customers, was described as a game changer in the industry. Now it is being accused of trying to monopolize the market.

About a dozen van drivers staged a protest in Kwun Tong on Friday morning, alleging that GoGo Van’s policies are hurting their income.

The drivers have three major complaints about the app.

First, the driver verification process is said to be too loose. If drivers want to link up with GoGo Van, all they have to do is upload copies of their motor vehicle license, driving license and identity card on the group’s website.

Ordinary drivers, including those who are already employed by other companies, have registered with GoGo Van to make extra money.

Professional van drivers complain that competition has grown stiffer as a result.

One of the drivers, who calls himself “Obama”, said it is easy to get business from GoGo Van once the registration is done, as Stand News reports.

But isn’t that what sharing economy is all about? Doesn’t it allow resources to be efficiently utilized?

Yes, but consider this:

A customer once called for a van on the GoGo platform to travel from Yau Tong to Sheung Shui in the middle of the night,” Obama recalls. “The first vehicle that came to pick him up was a truck loaded with seafood. The customer refused to get into the vehicle. The second was a taxi, and the third was a bread truck. None of them was a van!”

What’s more, the van drivers now think the start-up is monopolizing the market and weakening their bargaining power.

GoGo Van has slashed its fees in a bid to grow market share and compete with rivals like Easy Van and Uber.

If you call GoGo Van after 9 p.m., the extra fee is just HK$30, down from HK$50 previously. That means the driver’s income has been cut.

Van drivers also accuse GoGo Van of setting up its own fleet to compete with freelance drivers on its platform.

Before GoGo Van was born, van drivers used to pay a monthly fee to a call center to match them up with customers.

The free and convenient service it provides has made GoGo Van one of the most successful local startups in recent years.

The company was set up by three youngsters in 2013 with an initial capital of HK$200,000 (US$25,800).

It attracted a few rounds of venture capital last year, one of which was from mainland social network Renren.com. The site invested HK$80 million in GoGo Van for a 10 percent stake.

The startup is now valued at HK$800 million based on the capital injection.

It has a market share of over 60 percent, with around 20,000 drivers listed on its platform.

Because of the vigorous competition, GoGo Van hasn’t monetized its platform yet. In other words, the group does not charge drivers and customers a dime for the service it provides.

So, from a business perspective, the accusations that the van drivers have levelled against GoGo Van may actually be the steps the startup has necessarily taken to establish itself amid the stiff competition.

It has to expand its market share by soliciting as many drivers as it could until the company’s scale is big enough to for it to start thinking about taking commissions or selling advertising space on its vans and app.

Until now, GoGo Van is still losing a couple of million Hong Kong dollars per month.

In an interview with Next Magazine a few months ago, co-founder Steven Lam revealed that his monthly income is around HK$10,000 and he still takes the MTR to the office every day.

– Contact us at [email protected]

CG

EJ Insight writer

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