Logistics platform Lalamove, known as Huolala in China, apologized to family members of a 23-year-old woman who died while using the moving service, according to a post on the company’s official Weibo account on Wednesday. In a first response on Sunday, the firm said that the female “jumped” out of the window of a van on February 6.
In the latest announcement, Lalamove admitted the absence of a proper security and alarm system, as well as a sound recording function in its vehicles, and that its slow response caused the grieving family additional suffering.
“Their crisis management has been too sluggish,” said Wei Wuhui of the Shanghai Jiaotong University. “The death of a user is a very important thing in China’s business world. It could negatively affect Lalamove as similar incidents have hurt Didi Chuxing and Baidu.” Costs will increase as the firm has to put safety measures in place and its IPO plan could also be affected, he added.
In December and January, Lalamove raised close to USD 2 billion from investors including Sequoia China, Hillhouse, and Shunwei Capital in several funding rounds, reaching an estimated valuation of USD 10 billion. The company disclosed on Wednesday that founder and CEO Zhou Shengfu will spearhead the effort to roll out new safety measures.
These include an around-the-clock response to facilitate police investigations, which is slated to be available by March 7, an in-app recording function by March 14, and a test of an in-vehicle and out-of-the-vehicle recording system before March 10.
The company will also introduce a feature to track unfinished orders. The incident happened on February 6, but Lalamove only heard about it when the police contacted the company two days later. Its app will further warn users when a driver takes a detour from a designated route.
The problem with driver screening
Other measures include stricter entry barriers for drivers. Before leaving the car through the window, the women and the driver had a dispute about the correct journey, the latter confessed to the police. She was however communicating with colleagues in a normal way just a few minutes earlier, prompting her family to question what really happened after that, according to Chinese media. The driver was arrested for allegedly causing someone’s death due to negligence.
A Lalamove customer named Wudy told KrASIA that the firm’s announcement appears more like a PR gesture to calm public anger. “What Lalamove needs to do first is increase the screening of drivers, training them on how to offer acceptable service, and supervising them,” she said. “But the company mentions driver-related measures only at the end.”
She describes how she had different customer experiences, mostly depending on the drivers. “Some were very helpful, on time, and adhered to the agreed price, while others asked for extra money and some kept yawning when driving,” she said. For her, Lalamove and its peers have been too much in a price war to attract customers, not paying too much attention to the supervision.
“Internet-based platforms, which include passenger transport and cargo shipping, all face the challenge on how to manage their drivers,” said Tang Hongbin, founder and CEO of Duckbill, which connects truck drivers and companies. “This challenge will always exist, as seen from the past incidents.”
Drivers were sure to blame as they actually made the mistakes, but the public is expecting the platforms to take responsibility, Tang told KrASIA. “This is logical, as they are the ones to collect the additional revenue due to their super-large scale.”
