Unfair market practices are at the center of a new crackdown on ride-hailing companies in China, with the country’s Ministry of Transport and other watchdogs ordering 11 app-driven platforms to halt unfair practices, the Associated Press and other news outlets reported on Thursday (Sept. 2).
The companies, including the ride-hailing unit of shopping platform Meituan, and transportation giant Didi, were told by regulators on Wednesday (Sept. 1) that they and nine other ride-hailing firms have until the end of this year to correct problems.
Among other allegations, regulators said that the platforms recruit unqualified or unlicensed drivers and then put the “risks of operations onto drivers,” according to a statement from the Transport Ministry.
Other regulators involved in the probe include the Cyberspace Administration of China and the State Administration of Market Supervision.
Regulators also ordered ride-hailing platforms to reduce the percentage they take from transactions and protect passengers’ personal data. The Chinese government has previously voiced concern over gig workers’ lack of “basic welfare benefits” and excessive hours on the job, according to a report in the Maylasian news outlet TheVibes.
The Transport Ministry told ride-hail platforms to “maintain a fair competitive market environment” and promote the “healthy and sustainable development” of the transport industry.
The 11 ride-hail firms were ordered to conduct self-inspections, correct issues, and develop compliance plans before 2021 closes out.
There are roughly 236 ride-hailing apps in China, according to YicaiGlobal, and more than 3.51 million licensed drivers. Commissions to the platforms are 35 to 50 percent of each ride’s fare, with the drivers getting the balance, according to a survey by People’s Daily Online.
Didi has close to 90 percent of the ride-hail market share in China and is being probed for alleged violations regarding users’ data.