The higher-ups make policies, while those beneath find ways around them.
Didi Chuxing drivers in Shanghai and Beijing can be excused if they clutch to this often-repeated mantra in the face of new rules that disqualify most of them from their jobs.
In regulations published last week, Beijing and Shanghai barred migrants as well as non-local vehicles from operating on online ride booking platforms like Didi, China's ride-hailing juggernaut that dominates over 80% of the market. The Beijing laws take effect in May, while Shanghai has already begun clamping down on ineligible cars and drivers.
The measures outlaw more than 9 out of every 10 of the 610,000 Didi drivers in two of China's busiest cities. And many fear the change will be a devastating blow to the company that mostly relies on its sheer volume of rides to prop up a $34 billion valuation.
But the out-of-town drivers who flooded to first-tier cities to take advantage of the generous subsidies provided by ride-hailing companies are mostly unfazed by their new status as "illegal."
Local authorities have been cracking down on online drivers and ride-hailing companies since the companies' inception in 2013. Regulators and law enforcement agencies hold random roadside inspections, and even have plainclothes officers pose as passengers in order to pick out online drivers from traffic. Drivers are fined up to 30,000 yuan for "illegal operations."
Until now, Didi's policy has been to reimburse a portion of the fine each month to help keep the unlucky drivers on board. Drivers typically pay 25% of each fare back to the company.
Didi would not comment on the future of the bailout policy for non-local drivers, now that the law decrees them illegal.
For those who don't want to increase their chances of being caught while cruising on the roads, the easiest career change is to go underground.
Didi gave a strongly worded response to the Beijing and Shanghai's draft laws two months ago, predicting that residency and license-plate requirements would "more than double ride-share costs" and make users wait over 15 minutes for their ride to arrive. The platform also warned policy makers of potential social unrest as drivers are forced out of their jobs.
Didi declined to comment on whether it will take the initiative to weed out-of-town drivers and cars from the platform. New drivers in Beijing and Shanghai who register must have a local license plate, though applicants are not required to have a coveted Beijing or Shanghai hukou.
The company may even allow migrant vehicles and drivers where the law does not. Zhao Jian, the professor of management, believes that should governments require Didi to screen drivers or share information they hold about their drivers, the company could still easily harbor disqualified drivers.
Beijing and Shanghai's ban on migrant from ride-hailing platforms falls in line with an initiative to rein in the population of megacities. Having residents of nearby provinces flock to large cities for Didi subsidies runs against existing measures like demolishing cheap illegal accommodation and shuttering schools for migrant children in Beijing.
The Shanghai government could not have put it in plainer words.
"The explosion of the Shanghai population has taken a huge toll on the city's resources and management. Therefore, the Shanghai government stipulates that online drivers must have local hukou," it said.
Though the curb on non-locals may not hit the industry as hard as once feared, analysts say the laws are a serious detour on the road to Didi's rumored plans for an initial public offering (IPO) in 2018.
"If an IPO is still possible, Didi needs to continue shifting its business to car rentals, buses and other services," said Zhang Yi, CEO of consultancy iiMedia. "Regardless of how much orders will go down, regulation risks have proved to drive up operation costs, and this will shave down its valuation."
Despite what drivers say, the moment of truth for migrant drivers really comes after the Spring Festival, said Zhang, who attended many government consultation sessions.
"It's no coincidence that the laws were released a month before Chinese New Year, when migrants flock home," Zhang said. "People may be reluctant to leave when they are still getting by in the city, but the real deliberation is whether they will come back."
The higher-ups make policies, while those beneath find ways around them.
