Chinese regulators ordered 11 online cab-hailing platforms including those operated by Didi Global, Meituan and Alibaba Group to immediately rectify non-compliance behaviours, stop monopolistic practices and ensure data security.
Authorities from the Ministry of Transport, Central Cyberspace Affairs Office and other departments met executives from ride-hailing platforms on Wednesday, according to an official statement published on Thursday.
The companies were criticised for their marketing methods and “vicious” competitive measures including recruiting unlicensed drivers and vehicles.
Rectify non-compliance behaviours
According to the statement, authorities ordered companies to “immediately rectify non-compliance behaviours, jointly maintain a fair and competitive market order, and jointly create a good environment for the standardised and healthy development of the online car-hailing industry.”
Ride-haling apps were told to remove existing illegal vehicles and drivers from platforms and require qualified drivers and vehicles to apply for online car-hailing permits.
In line with President Xi Jinping’s “common prosperity” goals, authorities ordered the companies to ensure that drivers receive reasonable labour remuneration and rest, to standardise industry pricing behaviour and reduce percentage on commissions.
Companies were ordered to set up data security management systems and adopt necessary security measures to protect private consumer data.
Clamping down anti-competitive behaviour, protecting consumer data and promoting “common prosperity”, have been the prime agendas behind Beijing recent regulatory sweep.
Didi Global’s ride-hailing apps were removed from China’s smartphone app stores on data privacy violations, less than a week after listing in New York in late June.
The US-listed shares of Didi Global closed 11.9% higher on Wednesday. Meituan shares inched up about 0.1% and Alibaba Group shares rose 3.5% in Hong Kong on Thursday.