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No pan-EU Huawei ban as Commission endorses 5G risk mitigation plan

18:57 | 29 January

The European Commission has endorsed a risk mitigation approach to managing 5G rollouts across the bloc — meaning there will be no pan-EU ban on Huawei. Rather it’s calling for Member States to coordinate and implement a package of “mitigating measures” in a 5G toolbox it announced last October and has endorsed today.

“Through the toolbox, the Member States are committing to move forward in a joint manner based on an objective assessment of identified risks and proportionate mitigating measures,” it writes in a press release.

It adds that Member States have agreed to “strengthen security requirements, to assess the risk profiles of suppliers, to apply relevant restrictions for suppliers considered to be high risk including necessary exclusions for key assets considered as critical and sensitive (such as the core network functions), and to have strategies in place to ensure the diversification of vendors”.

The move is another blow for the Trump administration — after the UK government announced yesterday that it would not be banning so-called “high risk” providers from supplying 5G networks.

Instead the UK said it will place restrictions on such suppliers — barring their kit from the “sensitive” ‘core’ of 5G networks, as well as from certain strategic sites (such as military locations), and placing a 35% cap on such kit supplying the access network.

However the US has been amping up pressure on the international community to shut the door entirely on the Chinese tech giant, claiming there’s inherent strategic risk in allowing Huawei to be involved in supplying such critical infrastructure — with the Trump administration seeking to demolish trust in Chinese-made technology.

Next-gen 5G is expected to support a new breed of responsive applications — such as self-driving cars and personalized telemedicine — where risks, should there be any network failure, are likely to scale too.

But the Commission take the view that such risks can be collectively managed.

The approach to 5G security continues to leave decisions on “specific security” measures as the responsibility of Member States. So there’s a possibility of individual countries making their own decisions to shut out Huawei. But in Europe the momentum appears to be against such moves.

“The collective work on the toolbox demonstrates a strong determination to jointly respond to the security challenges of 5G networks,” the EU writes. “This is essential for a successful and credible EU approach to 5G security and to ensure the continued openness of the internal market provided risk-based EU security requirements are respected.”

The next deadline for the 5G toolbox is April 2020, when the Commission expects Member States to have implemented the recommended measures. A joint report on their implementation will follow later this year.

Key actions being endorsed in the toolbox include:

  •     Strengthen security requirements for mobile network operators (e.g. strict access controls, rules on secure operation and monitoring, limitations on outsourcing of specific functions, etc.);
  •     Assess the risk profile of suppliers; as a consequence,  apply relevant restrictions for suppliers considered to be high risk – including necessary exclusions to effectively mitigate risks – for key assets defined as critical and sensitive in the EU-wide coordinated risk assessment (e.g. core network functions, network management and orchestration functions, and access network functions);
  •     Ensure that each operator has an appropriate multi-vendor strategy to avoid or limit any major dependency on a single supplier (or suppliers with a similar risk profile), ensure an adequate balance of suppliers at national level and avoid dependency on suppliers considered to be high risk; this also requires avoiding any situations of lock-in with a single supplier, including by promoting greater interoperability of equipment;

The Commission also recommends that Member States should contribute towards increasing diversification and sustainability in the 5G supply chain and co-ordinate on standardization around security objectives and on developing EU-wide certification schemes.



Jiji raises $21M for its Africa online classifieds business

08:48 | 10 December

Pan-African digital classifieds company Jiji has raised $21 million in Series C and C-1 financing from six investors, led by Knuru Capital.

The Nigeria based venture, co-founded by Ukrainian entrepreneur Vladimir Mnogoletniy, has an East to West presence that includes Ghana, Uganda, Tanzania, and Kenya.

Buyers and sellers in those markets use Jiji to transact purchases from real estate to car sales.

“We are the largest marketplace in Africa where people can sell pretty much anything…We are like a combination of eBay and Craigslist for Africa,” Mnogoletniy told TechCrunch on a call.

The classifieds site has two million listings on its Africa platforms and hit eight million unique monthly users in 2018, per company stats.

Jiji sees an addressable market of 400 million people across its operating countries, according to Mnogoletniy. The venture bought up one of its competitors in April this year, when it acquired the assets of Naspers owned online marketplace OLX in Nigeria, Ghana, Kenya, Tanzania, and Uganda.

Jiji’s top three categories for revenues and listings (in order) are vehicle sales, real estate, and electronics sales (namely mobile phones).

With the recent funding, the company’s total capital raised from 2014 to 2019 comes to $50 million. Knuru Capital CEO Alain Dib confirmed the Abu Dhabi based fund’s lead on Jiji’s most recent round.

Jiji plans to use the latest investment toward initiatives to increase the overall number of buyers, sellers and transactions on its site. The company will also upgrade the platform to create more listings and faster matching in the area of real-estate, according to Mnogoletniy.

For the moment, Jiji doesn’t have plans for country expansion or company purchases. “Maybe at some point we will consider more acquisitions, but for the time being we’d like to focus on those five markets,” Mnogoletniy said — referring to Jiji’s existing African country presence.

To ensure the quality of listings, particularly in real-estate, Jiji employs an automated and manual verification process. “We were able to eliminate a high-percentage of fraud listings and estimate fraud listings at less than 1%,” said Mnogoletniy.

He recognized the challenge of online scams originating in Nigeria. “We take data protection very seriously. We have a data-control officer just to do the data-protection verification.”

With the large consumer base and volume of transactional activity on its platform, Jiji could layer on services, such as finance and payments.

“We’ve had a lot of discussions about adding segments other than our main business. We decided that for the next three to five years, we should be laser focused on our core business — to be the largest marketplace in Africa for buying and selling to over 400 million people,” Mnogoletniy said.

The company faces an improving commercial environment for its goals, with Africa registering some of the fastest growth in the world for smartphone adoption and internet penetration.

Jiji also faces competitors in Africa’s growing online classifieds space.

Pan-African e-commerce company Jumia, which listed in April in an NYSE IPO, operates its Jumia Deals digtial marketplace site in multiple African countries.

Swiss owned Ringier Africa has classified services and business content sites in eight French and English speaking countries. On car sales, Nigerian startup Cars45 has created an online marketplace for pricing, rating, and selling used-autos. 

Adding to the trend of foreign backed ventures entering Africa’s internet business space, Chinese owned Opera launched an online buy/sell site, OList, last month connected its African payment app, OPay.

eBay operates a partnership with MallforAfrica for limited goods sales from Africa to the U.S., but hasn’t gone live yet on the continent.

On outpacing rival in its markets, Jiji’s co-founder Vladimir Mnogoletniy touts the company’s total focus on the classifieds business, market experience, and capital as advantages.

“We’ve spent five years and raised $50 million to build Jiji to where it is today. It would take $50 to $100 million for these others to have a chance at building a similar business,” he said.



NHS pagers are leaking medical data

11:30 | 30 October

An amateur radio rig exposed to the internet and discovered by a security researcher was collecting real-time of medical data and health information broadcast by hospitals and ambulances across U.K. towns and cities.

The rig, operated out of a house in North London, was picking up radio waves from over the air and translating them into readable text. The hobbyist’s computer display was filling up with messages about real-time medical emergencies from across the region. For some reason, the hobbyist had set up an internet-connected webcam pointed at the display. But because there was no password on the webcam, anyone who knew where to look could also see what was on the rig’s computer display.

Daley Borda, a security researcher and bug bounty hunter, was at home in Florida when he stumbled upon the exposed webcam. The live stream was grainy, and the quality of the images so poor that it was just possible to make out the text on the display.

“You can see details of calls coming in — their name, address, and injury,” he told TechCrunch.

TechCrunch verified his findings. Messages spilling across the screen appeared to direct nearby ambulances where to go following calls to the 999 emergency services.

One message said a 98-year-old man had fallen at his home address. A few moments later, another message said 49-year-old male was complaining of chest pains at a nearby residence. One after the other, messages were flooding in, describing accidents, incidents, medical emergencies, often including their home addresses.

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Several screenshots of the amateur radio decoding software, revealing unencrypted pager messages from nearby NHS trusts. (Image: TechCrunch)

Borda spends much of his time scouring the internet for things that shouldn’t be online. He looks for exposed databases and devices and, like most other security researchers, privately reports them to their owners. If he’s lucky, the owner takes action. Better yet, they pay out a bug bounty for his efforts.

But he could not figure out who the rig belonged to. TechCrunch contacted the hobbyist’s internet provider to warn of the data exposure.

“Last night we contacted the customer to make them aware that there was a live webcam broadcasting on the open web from their household,” said a spokesperson from the internet provider. “The customer was unaware of the nature of the information being shown so has said that they will stop the feed on that particular camera.”

The hobbyist was picking up and decoding pager communications from a nearby regional National Health Service trust.

“With some cheap, relatively basic, software it is possible for hobbyists to access these frequencies and decode the information being sent, which appears is what has occurred here,” the spokesperson said.

Old but reliable

Pagers — or beepers — may be a relic of the past, but remain a fixture in U.K. hospitals.

These traditionally one-way communication devices allow anyone to send messages to one or many pagers at once by calling a dedicated phone number, often manned by an operator, which are then broadcast as radio waves over the pager network. But pagers still offer benefits where newer technologies, like cell phones, fall down. Because they work a low frequency, pager radio waves are able to travel further and deeper inside large buildings — particularly hospitals — which have thickened walls to protect others from X-rays and other radiation. Pagers also work across long distances, including in cell service dead-spots.

But few were thinking about message security when pager use was at its peak.

“They aren’t secure,” Andy Keck, an electronics and amateur radio hobbyist, told TechCrunch. Keck said messages sent over the pager network are encoded when they are converted into a burst of radio waves and broadcast over the air.

“But people don’t necessarily understand the difference between encryption and encoding,” he said.

Because the two widely used pager protocols — POCSAG and FLEX — are not encrypted, it’s easy to understand what messages are broadcast over the airwaves using free and open-source software.

For years one of the largest barriers to intercepting and decoding pager messages — or any other radio waves — was that hobbyists needed custom, often expensive hardware. But with the advent of software-defined radios, most hobbyists can get by with a $20 plug-in dongle and an antenna.

“It’s just enter the command to start the application, sit back, and start decoding in real time on the screen,” he said.

130,000 NHS pagers

Although the number of pagers has dropped to near-zero from their height in the 1980s, pagers still carry a considerable amount of information every day.

Pager messages can travel over a large distance, said Keck, depending on how high the transmitter is located. Most major cities are covered with some pager service. Given the geography of the U.K., amateur radio hobbyists can often pick up pager messages from different sources.

The NHS still uses about 130,000 pagers, according to the U.K. government’s latest count, or about 10 percent of the world’s current pagers in use. But the NHS has been told to stop using pagers altogether by 2021.

But it’s not clear how many trusts are exposing medical information — if at all.  According to NHS spokesperson Oliver Michelson, “each NHS organization is responsible for its own IT equipment and security.”

GettyImages 128243077

Pagers receive encoded, but not encrypted messages. (Image: Getty Images)

One NHS trust we spoke to said they had around 1,600 pagers and are managed by the trust. (We are not naming the trust, as it would expose their communications.) When asked if the trust was aware that pager messages are not encrypted and can be intercepted by amateur radio hobbyists, the spokesperson responded: “Yes.”

Another trust we spoke to said they were “aware” that the handful of pagers it operates do not encrypt their messages. The trust said their pagers were managed by a third-party.

PageOne, the last remaining pager network in the U.K., says in a brochure that its pager service can deliver “real-time messaging cost effectively and securely to their staff.”

But a spokesperson told TechCrunch: “PageOne ensures customers are aware of the ability to intercept messages in its terms and conditions” and that encrypted services “are available if required.”

The company said the majority of NHS pagers are operated on private pager networks operated by the trusts themselves.

‘Trivially interceptable’

Amateur radio hobbyists know all too well the risks posed by unencrypted pagers.

Over the years there have been numerous headlines of hobbyists picking up signals from nearby hospitals, including patients’ names and medical information. Some have even turned eavesdropping on hospital pagers into an art project.

Last month, hospitals in Vancouver were found broadcasting unencrypted patient medical data across the city.

Sarah Jamie Lewis, executive director at Open Privacy, who first revealed the issue, said the hospital pager messages were “trivially interceptable” by anyone nearby.

“It tends to be pretty common knowledge in the amateur radio community that these kind of broadcasts are going on but it’s only recently that we started seeing a culture of disclosure,” said Lewis.

In the U.K., it’s legal for amateur radio hobbyists to scan the airwaves but unlawful to disclose the contents of messages. That’s put some security-focused hobbyists who disclose exposed sensitive messages in a tough legal spot.

“You get this horrible situation where not disclosing is bad, but people have a right to know that their health data is being breached,” said Lewis.

But the penalties could be far steeper for organizations that expose sensitive health data. Exposing personally identifiable and health information violates GDPR, the Europe-wide data protection laws that came into force last year. Organizations can be fined heavily for breaching the rules.

With more than a year on the clock before the NHS pager ban comes into effect, it’s not a problem that can be easily fixed.

The obvious solution would be not to send sensitive health or medical data over pager messages. Clearly, as seen by the amateur hobbyist’s radio rig, that message isn’t getting through.

Got a tip? You can send tips securely over Signal and WhatsApp to +1 646-755-8849. You can also send PGP email with the fingerprint: 4D0E 92F2 E36A EC51 DAAE 5D97 CB8C 15FA EB6C EEA5.



European risk report flags 5G security challenges

17:49 | 9 October

European Union Member States have published a joint risk assessment report into 5G technology which highlights increased security risks that will require a new approach to securing telecoms infrastructure.

The EU has so far resisted pressure from the U.S. to boycott Chinese tech giant Huawei as a 5G supplier on national security grounds, with individual Member States such as the UK also taking their time to chew over the issue.

But the report flags risks to 5G from what it couches as “non-EU state or state-backed actors” — which can be read as diplomatic code for Huawei. Though, as some industry watchers have been quick to point out, the label could be applied rather closer to home in the near future, should Brexit comes to pass…

Back in March, as European telecom industry concern swirled about how to respond to US pressure to block Huawei, the Commission stepped in to issue a series of recommendations — urging Member States to step up individual and collective attention to mitigate potential security risks as they roll out 5G networks.

Today’s risk assessment report follows on from that.

It identifies a number of “security challenges” that the report suggests are “likely to appear or become more prominent in 5G networks” vs current mobile networks — linked to the expanded use of software to run 5G networks; and software and apps that will be enabled by and run on the next-gen networks.

The role of suppliers in building and operating 5G networks is also noted as a security challenge, with the report warning of a “degree of dependency on individual suppliers”, and also of too many eggs being placed in the basket of a single 5G supplier.

Summing up the effects expected to follow 5G rollouts, per the report, it predicts:

  • An increased exposure to attacks and more potential entry points for attackers: With 5G networks increasingly based on software, risks related to major security flaws, such as those deriving from poor software development processes within suppliers are gaining in importance. They could also make it easier for threat actors to maliciously insert backdoors into products and make them harder to detect.
  • Due to new characteristics of the 5G network architecture and new functionalities, certain pieces of network equipment or functions are becoming more sensitive, such as base stations or key technical management functions of the networks.
  • An increased exposure to risks related to the reliance of mobile network operators on suppliers. This will also lead to a higher number of attacks paths that might be exploited by threat actors and increase the potential severity of the impact of such attacks. Among the various potential actors, non-EU States or State-backed are considered as the most serious ones and the most likely to target 5G networks.
  • In this context of increased exposure to attacks facilitated by suppliers, the risk profile of individual suppliers will become particularly important, including the likelihood of the supplier being subject to interference from a non-EU country.
  • Increased risks from major dependencies on suppliers: a major dependency on a single supplier increases the exposure to a potential supply interruption, resulting for instance from a commercial failure, and its consequences. It also aggravates the potential impact of weaknesses or vulnerabilities, and of their possible exploitation by threat actors, in particular where the dependency concerns a supplier presenting a high degree of risk.
  • Threats to availability and integrity of networks will become major security concerns: in addition to confidentiality and privacy threats, with 5G networks expected to become the backbone of many critical IT applications, the integrity and availability of those networks will become major national security concerns and a major security challenge from an EU perspective.

The high level report is a compilation of Member States’ national risk assessments, working with the Commission and the European Agency for Cybersecurity. It’s couched as just a first step in developing a European response to securing 5G networks.

“It highlights the elements that are of particular strategic relevance for the EU,” the report says in self-summary. “As such, it does not aim at presenting an exhaustive analysis of all relevant aspects or types of individual cybersecurity risks related to 5G networks.”

The next step will be the development, by December 31, of a toolbox of mitigating measures, agreed by the Network and Information Systems Cooperation Group, which will be aimed at addressing identified risks at national and Union level.

“By 1 October 2020, Member States – in cooperation with the Commission – should assess the effects of the Recommendation in order to determine whether there is a need for further action. This assessment should take into account the outcome of the coordinated European risk assessment and of the effectiveness of the measures,” the Commission adds.

For the toolbox a variety of measures are likely to be considered, per the report — consisting of existing security requirements for previous generations of mobile networks with “contingency approaches” that have been defined through standardisation by the mobile telephony standards body, 3GPP, especially for core and access levels of 5G networks.

But it also warns that “fundamental differences in how 5G operates also means that the current security measures as deployed on 4G networks might not be wholly effective or sufficiently comprehensive to mitigate the identified security risks”, adding that: “Furthermore, the nature and characteristics of some of these risks makes it necessary to determine if they may be addressed through technical measures alone.

“The assessment of these measures will be undertaken in the subsequent phase of the implementation of the Commission Recommendation. This will lead to the identification of a toolbox of appropriate, effective and proportionate possible risk management measures to mitigate cybersecurity risks identified by Member States within this process.”

The report concludes with a final line saying that “consideration should also be given to the development of the European industrial capacity in terms of software development, equipment manufacturing, laboratory testing, conformity evaluation, etc” — packing an awful lot into a single sentence.

The implication is that the business of 5G security will need to get commensurately large to scale to meet the multi-dimensional security challenge that goes hand in glove with the next-gen tech. Just banning a single supplier isn’t going to cut it.



Emojivision app turns your iPhone’s camera into a real-time emoji painting machine

20:02 | 27 August

Your iPhone is capable of some impressive feats of computational photography, and a new app created by developer Gabriel O’Flaherty-Chan shows one way all that power can be put to creative use. Emojivision lets you see the world as if it were made up entirely of emojis.

The free app (which induces an in-app purchase for $2.79 that unlocks more emoji packs) works by breaking down your iPhone’s camera sensor input to its color palette fundamentals, finding its nearest neighbor from a subset of emojis (organized thematically within the app) and then rebuilding the image with a filter that overlays the image, and that can run at 60fps so you’d be hard-pressed to spot any lag between it and a real-time feed.

Screen Shot 2019 08 27 at 12.33.38 PM

You can use the app to take selfies, interpret photos from your phone’s photo gallery, or just mess around with resolution to see how finely detailed, or how abstractly and yet obviously emoji-based you can get. This isn’t the app to go to if you’re looking for a hyper-realistic or clear visual interpretation of your face, but it is a fun thing to show your friends – and an impressive bit of software engineering, too.

O’Flaherty-Chan has create some noteworthy mobile software projects in the past – including when he managed to hack a fully playable version of Pokémon Yellow onto an Apple Watch. He’s currently working on building a gigantic real-time strategy game set within a procedurally-generated universe – like a ‘No Man’s Sky’ but with a focus on the RTS elements that should make for a very compelling and evolving approach to gathering resources and expanding your empire.



Mary Meeker’s 2019 Internet Trends report highlights China’s short-form videos and super apps

11:37 | 12 June

This year’s edition of Mary Meeker’s Internet Trends report, released earlier today, once again included a section on China prepared by Hillhouse Capital. There are now 3.8 billion Internet users globally, more than half of the world’s population, but growth is slowing (as demonstrated by declining smartphone shipments). Internet leaders in China can continue helping companies in other countries find ways to engage their users, the way WeChat launched features, including mini-programs and e-commerce, that are now ubiquitous in messaging and social media apps around the world.

China has the most internet users in the world, about 800,000,000 or 21% of the world’s total internet users (it is followed by India, the United States and Indonesia). Chinese companies took seven of the top 30 spots for internet market cap leaders: Alibaba, Tencent, Meituan Dianping,, Baidu, NetEase and Xiaomi—stable, just one less than one year.

Mobile Internet users in China grew 9% year-over-year in 2018 to 817 million, while mobile data usage increased 189% year-over-year, faster than 2017’s 162% growth. While data volume share (or new data captured, generated and replicated by region) is falling in the U.S., it is rising in China, second in growth only to EMEA (Europe, the Middle East and Africa).

In particular, this year’s report highlighted short-form videos as a key driver of Internet usage growth in China, leading user and usage growth across all app categories. Users spent a total of nearly 600 million hours per day watching short-form videos on mobile in April 2019, more than in any other category. Short-form video leaders included Douyin (known as Tik Tok in international markets), Kuaishou and Haokan.

Another major video trend is live-streaming, especially for e-commerce platforms. Taobao got more than $14 billion GMV through live-streaming in 2018, while fashion e-commerce and social media platform Mogu attributed 24% of its GMV to live-streaming, which also had a four times repeat purchase rate.

While WeChat’s mini-programs have already influenced other apps like Instagram, WhatsApp, Kakao and Line, there is still plenty to learn from them. For example, the role they play as CRMs for many Chinese retailers: many brands send information about sales and other promotions by public accounts on WeChat or send red packets for discounts to group chats to drive engagement.

The rise of the “super app”

Meituan Dianping’s “super app” is growing increasingly huge. It now includes more than 30 services (for example, restaurant reviews, reservations, movie tickets, home rentals, hotel bookings, payments, travel booking, food delivery and grocery ordering), although restaurant-related services and travel make up as much as 88% of its revenue. The company’s annual transacting users grew 26% year-over-year to 412 million.

Alipay has also evolved from a payments app to hosting more than 200,000 mini-programs, including ones that enable users to manage their healthcare, investments, invoices, car payments and insurance. Alipay now counts more than one billion users, 70% of whom use at least three financial services in the app.

The influence of these “super apps” can be seen outside of China in apps like Grab, Rappi and Uber, which are adding more services (for example, Uber’s app now lets you order food, reserve e-bikes and find promotions at other businesses).

From offline to online 

Another trend that may make its way to other countries is the wide variety of business models used by grocery delivery apps in China. In the U.S., most grocery delivery apps take one of two approaches, either partnering with retailers and delivering groceries from their brick-and-mortar stores to users (like Instacart) or delivering from their own stores or warehouses, like Amazon Prime Now and Whole Foods.

In China, on the other hand, grocery delivery apps are divided into four business models. Some, like Alibaba’s Freshippo (Hema) and’s 7 Fresh, own, operate and offer delivery or pickup from their own stores, while others like Miss Fresh and Dindong Maicai, deliver from their own warehouses, using their own fulfillment systems. A third group, including Xingsheng Youxuan, Songshu Pinpin and Dailubo, works with local franchised partners and allows users to order or make group purchases in WeChat mini-programs for next-day delivery or pick up. The fourth group offers quick deliveries from retail partners and includes big companies like Meituan, Alibaba’s and Taoxianda, and JD.

Riding the same offline-to-online wave, educators are digitizing classes that were traditionally taught in person. Online tutoring has hit the mainstream as K-12 students embrace homework apps to get afterschool help. Similarly, parents sign their younger children (ages 3-10) up for English and coding classes hosted on smartphones.

The Chinese government has also gone digital and is increasingly offering public services through in-house apps and third-party super apps such as WeChat and Alipay. The list of tasks that citizens can complete on their phones includes applying for visas, paying utility bills, virtually queuing up at hospitals, renewing a driver’s license, and many more that can save people the hassle of hopping from one government office to another.



Can China’s ride-hailing leader Didi repair its troubled reputation?

11:27 | 6 May

2018 was supposed to be another bright year for Didi Chuxing. The ride-hailing upstart had been celebrated as a success story in China’s booming sharing economy. Six years after founding, it had become the default app for Chinese people to move around, thanks in no small part to its acquisition of Uber China in 2016. Meituan Dianping and other challengers struggled to curb its dominance and the confident, promising startup was reportedly on course for a public listing as early as 2018.

Then all the excitement ceased. Last May, a female passenger was raped and killed by her driver on Didi’s popular hitch-hiking service. Just three months later, another incident shocked China after a Didi customer was killed in a similar circumstance.

The murders cast a huge shadow over the world’s largest ride-sharing company by number of rides. Celebrities rushed to social media with calls to #DeleteDidi, while Chinese authorities lashed out at Didi’s “unshirkable responsibility,” ordering it to indefinitely suspend its Hitch feature and ramp up safety standards.

Didi said there’s “no definite timetable” for relaunching Hitch, but people familiar with the matter told TechCrunch the service will likely resume later this year after Didi fully consults the public and all other stakeholders.

In a humbling move, Didi apologized and admitted that its fixation on growth had caused irreversible harm. In an open letter (link in Chinese) to the public, President Liu Qing and CEO Cheng Wei promised to “stop using scale and growth as a measurement.”

Safety, the executives pledged, would become the company’s top priority going forward. That’s despite the fact that Didi has not generated a profit since launching, but it’s apparently in no rush to shore up its balance sheet. Didi “has no timeline or schedule for an IPO,” a source with direct knowledge of the matter told TechCrunch.

Eight months in, Didi’s effort to brighten its dented image as an unsafe service has cut across its key leaders and internal departments, and it has proven a challenging journey.

Moral reckoning

“30 million trips are completed on Didi’s platform every day. That’s more than 10 billion trips a year. How do we make sure there is no incident in these 10 billion trips? This is indeed a challenge for the world,” asked Didi CTO Zhang Bo, clad in a plain blue shirt, during an interview with TechCrunch at the company’s Beijing headquarters.

While absolute safety is a nearly impossible task, there are other more tangible goals pertaining to growth and market share. As Didi brought on more shareholders in each funding round — the company has raised at least $20.6 billion to date, Crunchbase data shows — the bottom line inevitably became more pertinent.

Economic goals aside, many tech startups set out with an inherent sense of mission, or zeal, as some claim, to make the world a more efficient place. Didi’s was to shorten wait times for both cab drivers and passengers in China.

“When Didi first started, we had one simple goal. We realized taxi hailing was very inefficient. Before Didi existed, people in Beijing had to wait at least 20 minutes until a taxi pulled up. Even then, drivers often refused passengers,” Zhang recalled. “We wondered if we could overcome this sort of information asymmetry using the mobile internet.”

Didi entered Australia in June 2018. / Photo: Didi Chuxing

That was 2012. Didi has since morphed into a one-stop app for hiring cabs and private cars, in addition to a slew of mobility services like rental bikes and scooters, car insurances and next-gen technologies like autonomous driving that are still in the lab. Its global footprint now spans China, Japan, Australia, Mexico and Brazil. When the startup took over Uber’s local business in 2016, it quickly ballooned to account for 90 percent of China’s ride-sharing market.

Safety has, along the way, been somewhere at the back of Didi’s mind. Statistics from China’s Supreme Court show that crime incidents per 10,000 ride-hailing drivers are 0.048, and 77.8 percent of the time, riders are victimized. But until a fatal killing, the company’s drive to dominate the market seemingly outweighed the need for moral reckonings.

“Didi has always emphasized safety internally, but the two incidents from last year really sounded an alarm for us,” reflected Zhang.

The need to get millions of drivers “made [ride-sharing companies] lower their standards and affected safety, [including] background checks, driver training and education, experience, continuous checks, monitoring of working hours for fatigue and drowsiness, distraction by multitasking with a cell phone and passenger demands,” Alejandro Henao, a mobility researcher at the National Renewable Energy Laboratory in Colorado, told TechCrunch in an email.

“Safety needs to be a top priority for these companies but it doesn’t seem to be,” Henao added. “It’s a reflection of what I call a ‘quantity over quality’ mistake, where rushing to get volume — millions, billions of rides, passenger and drivers — compromises other factors, including safety.”

Safety at all costs

The dilemma of Didi is not unique. All ride-sharing businesses, regardless of scale, face the tough decision between responsible growth and safety.

They can of course work on both; but often they must pick one. In a world where algorithms run many aspects of our lives, every decision tech bosses make can shape our movement, consumption, mental state among many other things.

The murders revealed major deficiencies in the Didi app and its processes. One key vulnerability was the decision to outsource its passenger support system, which was criticized for failing to act on a prior complaint against one of the drivers suspected of killing. Keeping an in-house customer service team would clearly fortify the overall safety system, but it is a move that will impact the bottom line for a company that is already some way from profitability.

Didi reportedly suffered from a $1.6 billion loss last year. The firm recently shed some light on its financials during a Q&A with the public. While its core ride-hailing business charged an average of 19 percent in commissions, overall expenditures, including tax payments and driver bonuses, stood at 21 percent, meaning the segment lost 2 percent per ride.

Didi’s headquarters in Beijing / Photo: Didi Chuxing

Unlike other tech-powered offline transactions, where the encounter between the supply and demand sides is usually brief, such as food and online shopping delivery, ride-hailing passengers and drivers enter an enclosed space together for far longer periods of time.

“Before the encounter [between the driver and the passenger], neither of them can predict exactly what will happen. This kind of experience is unique [to ride-sharing], and other online-to-offline transactions almost never have to deal with the same circumstance. As such, many problems can emerge, especially given Didi’s size,” Zhao Shuai, head of artificial intelligence at Didi, told TechCrunch at the company’s headquarters.

Following the incidents, Didi announced it would spend 140 million yuan ($20.8 million) to improve its support system and set up an 8,000-strong customer service team. A flurry of other measures ensued, including the addition of a panic button linked to regional police stations. In-trip audio recording is now compulsory — the clips are deleted a week later assuming no dispute is reported, Didi assures. Drivers are asked to scan their face for identity checks throughout the day, as opposed to just once a day when they began their shift per the old setup.

The list of new measures continues, and there’s probably no correct answer when it comes to the right amount of safety features handling millions of daily rides.

“I had no confidence when I was given the job,” conceded Huang Yuanjian, who was appointed to lead a team of 30 top product managers to build out Didi’s safety feature. “No one knew how safety should be done in the mobile transportation industry, but it’s been a very fulfilling task being able to bring more safety through technology.”

When asked if Didi is concerned about the costs generated by its pivot, Zhang claimed that the company will “spare no effort to invest in safety.”

“Our investors are very supportive. They share our view that safety and long-term development go hand in hand… It’s hard to do safety well, but when the work is completed, it will inevitably become an industry standard,” the technology chief asserted.

Aside from the outsized investment in staffed customer support, Didi is also trying to minimize costs by replacing human labor with artificial intelligence technology. A team led by Zhao, who was previously one of the earliest product managers for Microsoft’s Chinese chatbot Xiaobing, is building an AI-powered assistant to aid Didi’s customer support staff. The bot is able to answer “the majority of” inquiries before pointing riders to a human agent if needed, according to Zhao. AI is also able to automatically create support tickets and log most of the conversation details for the agent.

“In the long run, passengers will choose what they believe is the safer option,” said Zhang. “We hope to not only be the world’s biggest one-stop transportation platform, but also the platform that offers the best experience and commands the most respect.”

Drivers’ grievance

As Didi works to appease customers who worry about riding with strangers, its new stringent rules have sparked concerns among drivers.

“Didi clearly prioritizes customers over drivers. When a passenger complains, even if it’s not the driver’s fault, Didi often assumes it is,” said a Beijing-based Didi “fleet leader” who manages more than 100 ride-hailing drivers.

Didi’s chauffeur service. / Photo: Didi Chuxing

Several other Didi drivers TechCrunch spoke to echoed that complaint, recounting cases of short-fused customers who take their frustration in life out on the drivers. It’s challenging to monitor what exactly happens inside a vehicle, save for determining the true nature of the dispute and resolving it. The public often overlooks the fact that driving a taxi, or joining as a ride-hailing driver, is one of the most dangerous jobs out there as it requires dealing with customers of all kinds, carrying significant amounts of cash and, at times, driving to remote areas late at night.

“The stricter the rules are, the less genuine the drivers become,” said the fleet leader. “Didi drivers have a lot to put up with.”

In response to the alleged unfair treatment, a Didi spokesperson said the platform “focuses on both drivers and passengers.”

“When passengers trust us and continue to use our services, it translates to better income for drivers,” said the spokesperson. “Our recent safety upgrades, including more stringent driver vetting and driver training programs, aim to address riders’ concerns and improve their trust in us and our drivers.”

Indeed, safety is not something that ride-hailing apps can solve on their own as it is “a three-part responsibility of regulators, companies, and drivers,” Adam Cohen, a researcher at the Transportation Sustainability Research Center at the University of California, Berkeley, told TechCrunch.

“Drivers have a responsibility to self-regulate and ensure that they are complying with all regulatory requirements and serving the public professionally,” added Cohen.

Didi is now under pressure to not only please its riders but also keep its 31 million drivers loyal and accountable. To that end, the company recently announced to set up a team of 2,000 support staff by year-end to serve, train and seek feedback from its drivers on a daily basis.

Besieged by challengers

As tightening regulations in China put a squeeze on the number of ride-hailing cars and drivers, new business models threaten to take customers away from Didi. One of them is AutoNavi, the mapping and navigation service owned by Alibaba, which is also an investor in Didi. It offers a ‘super aggregator’ app that allows customers to hire rides from an array of different apps — including Didi — in one place to, in theory, shorten wait times.

BEIJING, CHINA – SEPTEMBER 16: (CHINA OUT) Drivers stand by cars of Shouqi Limousine & Chauffeur, a taxi-booking app launched by state-owned enterprises Shouqi Group and Xianglong Taxi Co, during the release of Shouqi Limousine & Chauffeur on September 16, 2015 in Beijing, China. (Photo by VCG/VCG via Getty Images)

The model has already spawned followers. In late April, Tencent-backed Meituan introduced its own marketplace for ride-hailing apps after struggling to establish a major foothold with its Didi equivalent. Didi is also open to working with outside partners, according to Zhang, although he did not give further details of how such a collaboration might work.

“We don’t think Didi itself can revolutionize the massive transportation industry. We hope to be more open and create win-win situations. We are considering allowing outside automakers to tap some of Didi’s technology capabilities,” the executive said.

When asked if these new players constitute a threat, Zhang argued that Didi’s stepped-up safety measures “will be a huge competitive advantage in the long run.”

Didi also enjoys a significant network effect, which denotes that services or goods become more valuable when more people use them. A platform with more drivers, Zhang explained, means less waiting time for passengers.

Didi still holds a great lead over its rivals even after losing about 4 million monthly active users between August and December, stats from data provider Jiguang show. The app recorded 66 million MAUs in December, dwarfing runner-ups Shouqi Limousine & Chauffeur and Caocao Zhuanche, which are both backed by traditional automakers and each served around 4 million MAUs in the same month.

“Didi’s network is in itself a competitive advantage,” assured Zhang.



Tencent’s latest investment is an app that teaches grannies in China to dance

13:58 | 22 April

Besides churning out video games for China’s young generations, Tencent has also been attuned to the need of silver-haired users: its latest bet is an app that teaches middle-age and elderly users, most of whom are female, how to dance.

Called Tangdou, or “sugar beans” in Chinese, the app announced on Monday that it’s raised a Series C funding round led by Tencent with participation from existing investors GGV Capital and Xiaomi founder Lei Jun’s Shunwei Capital, as well as IDG Capital.

The financial infusion makes for an interesting move for Tencent, whose WeChat messenger counts users over the age of 55 as its fastest-growing group. In fact, Tangdou has piggybacked off WeChat to acquire users by creating lite-apps that are designed for ease of use and run within the ubiquitous chatting tool, which is many senior users’ first taste of the internet.

While Tangdou did not disclose the size of the round, the new proceeds brought its total funds raised to date to nearly $100 million. It last inked $15 million (in Chinese) from a Series B funding round in 2016 and another $5 million from a B-plus round in 2017.

“As [China’s] mobile internet enters the ‘second half’ of its development phase, the markets for maternal and child care, middle-age and elderly users have become the new red-hot verticals,” said GGV’s managing partner Jenny Lee in a statement.

Of China’s 829 million online users, 12.5 percent were above 50 years old in 2018, up from 10.4 percent in the year-earlier period, according to data collected by the government-run China Internet Network Information Center.


Screenshots of the Tangdou app / Source: Tangdou

Clad in color-coordinated costumes, the so-called demographic of “square-dancing aunties,” a term that sometimes carries derogatory color for the dancers are lashed for blasting deafening music, shimmy in parks, squares and when public space is in short supply, on sidewalks. Dancing in the public is now a daily routine for hundreds of millions of female retirees in China, a phenomenon that’s fueling an emerging market, and Tangdou is one of the players who got in early.

Founded four years ago, Tangdou began by offering video tutorials that teach grannies and aunties how to dance but has over time morphed into a one-stop app fulfilling news reading, networking and other needs for its senior users. The app’s content now touches on a wide variety of topics, from fashion, food, health to skin care, and it’s dabbled offline to host meetups for those craving a sense of camaraderie.

All told, the company claims it serves 200 million users across its range of products. More than 4,000 offline events take place each month attracting over 500 thousand attendees. 400 thousand users consume videos and articles on the Tangdou app each month and spend an average of 33 minutes on it every day. That level of user loyalty makes Tangdou an ideal destination for advertising, which is indeed one of the company’s major revenue sources. Tangdou is also mulling an ecommerce business and other forms of offline services, including dance classes and tours for its dance enthusiasts.



Verizon and T-Mobile call out AT&T over fake 5G labels

18:56 | 8 January

AT&T recently started a shady marketing tactic that labeled its 4G network as a 5G network. Now, rivals Verizon and T-Mobile are not having any of it.

In an open letter, in which AT&T is not named directly, Verizon says in part “the potential to over-hype and under-deliver on the 5G promise is a temptation that the wireless industry must resist.” TechCrunch agrees. The advantages of 5G networks are profound. The next generation of wireless networks will bring more than just increased speeds and AT&T’s current campaign of calling a 4G network a 5G network clouds the water.

T-Mobile is more direct in its criticism of AT&T. Because that’s how T-Mobile rolls. Watch.

didn’t realize it was this easy, brb updating

— T-Mobile (@TMobile)

This isn’t the first time AT&T has employed this mislabeling campaign. The wireless carrier did something similar prior to launching its LTE network and it was shady then and it’s shady now.

Disclosure: TechCrunch is a Verizon Media company.



AT&T is lying to customers with 5G marketing

02:22 | 8 January

After a recent update some AT&T phones now have a 5G E icon. This icon replaces the one indicated the phone is running on a 4G network. But here’s the thing: The phone is still on a 4G network. AT&T has played these games before, too.

This nonsense is a marketing ploy by AT&T. The so-called 5G E (5G Evolution) network is just a beefed-up 4G network and not true 5G, which is still far from being ready for general consumption. AT&T used the same deceptive tactics before launching its LTE network.

Right now only select phones in a few markets will see the change. The wireless carrier intends to roll out this madness to even more phones and even more markets throughout the year.

Disclosure: TechCrunch is a Verizon Media company.


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