Didi and Uber Merged in Just 4 Years – Is Healthcare Disruption Next?

Let’s take a look at this alarming schedule:

Behind every disruption lie countless difficulties and pressures. Didi, through its competition with Uber, fundamentally reshaped China’s transportation landscape over four years, challenging numerous vested interests.

1. Disrupted the traditional taxi industry's profit chain

Just a few months before the promulgation of the Interim Measures for the Administration of Business Operations and Services of Online Ride-Hailing, major conflicts between traditional taxi drivers and Didi drivers were still erupting in cities such as Chongqing. Whether individuals, enterprises, or institutions, no party was willing to voluntarily cede its interests; the outcome had to be either a win-win situation or a decisive victory for one side.

In previous years, or even as recently as last year, few would have believed that the government would legalize ride-hailing services so swiftly, given the lack of precedent among major nations worldwide. The mere thought of the entrenched interests of the traditional taxi industry was enough to cause a headache. However, Didi’s story demonstrates that such vested interests are not insurmountable. The key lies in the weight of the interests you represent: once you become the world’s second-largest transaction platform, the traditional taxi sector’s interests diminish into those of a smaller stakeholder group.

Ultimately, it is your strength.

2. The Enlightenment and Efficiency of the Chinese Government

I reckon that even the boldest of Uber’s bosses, Travis Kalanick, could not have anticipated that China, rather than the United States, would be the first major country to open its doors to ride-hailing services. After all, ride-hailing originated in the U.S., where Uber has reached a valuation as high as $65 billion and has been regarded as the most outstanding global innovator in recent years.

Even so, Uber has frequently faced lawsuits in the United States and around the world, casting Kalanick in the light of a relentless warrior. Yet developments in China took him completely by surprise. First, Uber failed to become the market leader in China—the one arena where it invested most heavily globally yet still suffered defeat. Meanwhile, China has emerged as the largest and most open market.

I believe that the Chinese government engaged in extensive debate and discussion before opening up the ride-hailing sector. Even under the overarching national strategy of “Internet Plus,” affirming a new industry at such speed is undoubtedly a global feat.

We have often stated that in the internet era, particularly the mobile internet era, China has been on par with or even ahead of the rest of the world. Judging by the progress of ride-hailing services in China, the Chinese government also holds a leading position in terms of policy sensitivity and efficiency when responding to new developments and technologies.

3. What Are the Opportunities in Internet Plus Healthcare?

When VCBeat was founded in 2014, amidst the surge of internet healthcare, we engaged with many industry professionals who were deeply concerned. The key issues they raised were threefold: first, policy; second, user habits; and third, how to break down traditional interest chains. One cannot help but notice the striking similarities to the transportation sector and to the e-commerce industry of years past.

First, from a policy perspective, the Chinese government has consistently implemented open and enlightened policies that encourage innovation. It is paving the way for medical innovation through various measures, including multi-site practice, tiered diagnosis and treatment, primary healthcare, integration with medical insurance, and encouragement of commercial health insurance. The policy-related concerns that people previously had about internet healthcare companies are also being gradually resolved.

Second, user habits are undergoing significant changes. In 2014, when companies like Chunyu Doctor conducted offline promotions in hospitals, their initial focus was not on product features but on explaining what a mobile app is and what problems it could solve. Today, physicians’ awareness of internet healthcare products has greatly improved, and they have become highly selective. On the user side, there is already a substantial base of users for services ranging from appointment registration to medical consultations.

Third, the core of traditional interest linkages is actually tertiary hospitals. A year ago, when VCBeat interviewed several hospital presidents, many still dismissed internet healthcare with indifference; a year later, numerous hospital presidents are actively participating in various internet healthcare conferences. Hospital presidents mainly face two pressures: first, policy measures continue to tie down tertiary hospitals, and second, the pressure of patient attrition. Therefore, within the healthcare sector, it is not only entrepreneurs but also policymakers who are breaking the traditional chain of interests—a coordinated effort from both inside and outside.

First and foremost, we must acknowledge that any pain point will inevitably be resolved. This holds true for both the transportation and healthcare sectors; the difference lies in the approaches and levels of difficulty involved in addressing these pain points.

Healthcare is not progressing this quickly because it is significantly more complex and involves many more challenges to address.

Therefore, we need to first draw some key conclusions:

1. The so-called decline of internet healthcare is a false premise; the industry will not decline but is instead enhancing its problem-solving capabilities. For instance, existing internet healthcare solutions are not yet sufficiently diverse or thorough in addressing specific issues such as patients’ difficulty in accessing medical care, physicians’ low income, and hospitals’ challenges in patient acquisition. However, breakthroughs in this direction are inevitable. Much like early e-commerce, which experienced leapfrog development only after resolving the core challenge of payment processing, healthcare faces similar critical bottlenecks that must be overcome.

2. Existing interests have not been disrupted because the new interests are not yet significant enough.

At this stage, platforms such as Chunyu Yisheng, Haodafu, and Weiyi have achieved significant results, but they have not yet reached a critical tipping point. The so-called tipping point refers to the fact that their user base is not yet large enough, the frequency of use is not high enough, and they have not become sufficiently integrated into people’s daily lives.

To disrupt entrenched interests, your value proposition must outweigh the existing benefits. For instance, if a doctor or hospital generates an annual revenue of RMB 500,000, you must create RMB 1 million in value for them while enhancing their reputation and safety profile; under such circumstances, doctors would have no reason to decline participation. To meet these requirements, you must ensure a substantial influx of high-quality patients, a favorable medical environment, and robust safety guarantees. Achieving these conditions likely necessitates a large user base, which can generate non-medical value that subsidizes the financial interests of healthcare providers.

Therefore, it is not that traditional vested interests are unbreakable; rather, the incremental gains have been insufficient and the enabling conditions inadequate. However, as long as we continue to move forward, we will inevitably break through the existing structure of vested interests. In fact, the real resistance to breaking this structure may be less than that encountered in the transportation sector. Patients have no reason to object, and doctors, in reality, have little grounds for opposition either. As for hospital directors, even if some were to oppose, they represent only a small minority. The most likely scenario is that they will keep pace with the times. Indeed, we have observed that many renowned hospital directors in China demonstrate a strong understanding of the internet.

3. Finally, a few perspectives

Allow me to be so optimistic. Drawing from all of recorded history and my own limited life experience, I hold entrepreneurs in high esteem. Many successful entrepreneurs share a common trait: they excel at identifying opportunities within problems and achieving success through solving them.

Perspective 1: Internet healthcare is bound to succeed, and this will happen in the near future. Jack Ma once remarked that entrepreneurs are the group most sensitive to economic shifts, as “the duck knows first when the spring river warms.” Starting as a media outlet, VCBeat has engaged with various enterprises and communities across China and around the world, and has observed this reality: practitioners on the front lines tend to be more optimistic, as they consistently devise solutions to problems and press forward. This holds true for hospital directors, physicians, and entrepreneurs alike. Compared with 2014, professionals in traditional healthcare had undergone a rapid ideological liberation and accelerated their actions by 2016. Such momentum will inevitably drive geometric growth in the industry.

Perspective 2: The forces likely to disrupt the industry will most probably originate from the internet sector. Professionals with a traditional healthcare background have demonstrated exceptional performance in localized innovations, leveraging strong execution capabilities, deep industry insights, and abundant resources to achieve rapid breakthroughs across multiple areas—a trend that has become particularly evident since the second half of 2015. However, from an industry-wide perspective, entrepreneurs with internet backgrounds hold greater advantages in integrating the entire value chain. To truly disrupt the established interest structures of traditional healthcare, it is essential to construct a broader ecosystem of shared interests. The most plausible scenario lies in the combination, or integration, of these two groups. This is exemplified by the current trend where leading internet companies are aggressively integrating offline healthcare entities.