SOURCE / COMPANIES
More ride-hailing platforms ordered to rectify problematic operations
Published: Sep 02, 2021 09:27 PM
Alibaba-backed AutoNavi, or Gaode Map, set up ride-hailing stations for the elderly to call a car with one click in Beijing on June 19, 2021. Photo: VCG

Alibaba-backed AutoNavi, or Gaode Map, set up ride-hailing stations for the elderly to call a car with one click in Beijing on June 19, 2021. Photo: VCG



Chinese regulators have ordered major online ride-hailing platforms to rectify their problematic operations that have undermined market order and the interests of consumers and drivers, further widening a fierce campaign to crack down on illegal activities in the country's internet sector.

Five Chinese government agencies, including the transport ministry, the top market regulator and the cyberspace administration, summoned and questioned 11 online ride-hailing platforms, including Didi Chuxing and Meituan, the Ministry of Transport (MOT) said in a statement on its WeChat account on Thursday.

The authorities pointed out that some platforms were engaging in vicious competition through a variety of marketing measures, while also recruiting or enticing unlicensed drivers and cars to operate illegally.

"In this way, they disrupted the order of fair market competition, affected the safety and stability of the industry, and harmed the legitimate rights and interests of drivers and passengers," said the MOT statement.

The MOT said that these companies should review their own problems, immediately rectify non-compliant behaviors, safeguard the market order to ensure fair competition, and create a sound environment for the healthy development of the industry.

According to the ministry, platforms that attended the meeting pledged to check internal problems, monitor potential safety risks, conduct rectification to maintain fair competition, and immediately stop adding new non-compliant cars and drivers.

This is not the first time that Chinese authorities summoned the online ride-hailing platforms this year.

In May, eight Chinese regulatory authorities summoned 10 ride- and van-hailing platforms - including Didi Chuxing, Meituan and Alibaba-backed Gaode - over problems such as charging high agency fees, lacking transparency in allocation mechanisms, and arbitrarily adjusting pricing rules. At that meeting, the regulators urged these companies to make rectifications.

In addition, local authorities in cities like Shenzhen, South China's Guangdong Province also conducted talks with dozens of ride-hailing companies this year.

"Over years of rampant growth and brutal competition, the red-hot ride-hailing industry has created some livelihood problems like high fees and commission rates of up to 30 percent," Lu Zhenwang, founder of Shanghai Wanqing Commerce Consulting, told the Global Times on Thursday.

Plagued with loopholes, the industry has increasingly become the subject of complaints, harming the rights and interests of consumers, Lu said, noting that the authorities are determined to solve these problems, especially given that the country has pledged to pursue common prosperity for all.

If discussions don't solve these problems at the root, the authorities may take more stringent measures such as imposing fines and restrictions on the approval of new drivers to further regulate the industry, Lu said.