Biz / Tech

Chinese regulators order ride-hailing firms to rectify irregular practices

A total of 11 ride-hailing service platforms were ordered to to examine their operations and immediately rectify non-compliant behavior.

Chinese regulators have summoned 11 ride-hailing service platforms for talks over their irregular practices, ordering the firms to examine their operations and immediately rectify non-compliant behavior.

The transport ministry, Internet watchdog and other regulators on Wednesday ordered 11 such platforms by year's end to stop unfair competition tactics and practices such as recruiting unlicensed drivers, according to a statement published yesterday.

The ride-hailing industry led by companies such as Didi Global and Meituan employs millions of drivers who are part of China's growing gig economy, and platforms often jostle for market share by offering passengers and drivers discounts and incentives.

Some platform companies have used multiple marketing tactics to engage in vicious competition, and also taken part in illegal operations such as the hiring of unlicensed drivers, according to several regulatory authorities including the Ministry of Transport and the Office of the Central Cyberspace Affairs Commission.

The 11 firms, including Didi Chuxing and the ride-hailing service of Meituan, were ordered to cease recruiting non-compliant cars and drivers, stop vicious competition and disorderly expansion, and ban practices that exclude or restrict competition.

The authorities also called on the platforms to regulate their pricing to reduce the commission they take from drivers.

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