Rideshare companies become new target for Chinese regulators

The Chinese market regulator has extended its review of the country’s tech companies to the ridesharing sector, warning executives at Didi Chuxing and nine other companies against price fixing and data monopolization.

Executives from 10 companies that operate platforms for carpooling and freight deliveries were called on Friday for a meeting with eight government departments, including the State Administration for Market Regulation, the Ministry of Transport and the Ministry of Public Security, according to the state run China Transport News.

Ridesharing platforms have been asked to address several issues, including excessively high costs for drivers, opaque profit-sharing mechanisms and arbitrary price changes. Freight platforms have been accused of monopolizing transport data, driving down industry prices, and charging random members extra fees.

The summons is part of an evolving campaign by Chinese regulators to rule over its internet giants and enforce new rules to break monopolies and ensure user data protection, according to Will Tao, an independent technology analyst.

The campaign, which shifted into high gear after regulators unexpectedly canceled Ant Group’s successful public offering, pitted internet entrepreneurs nationwide against the Chinese Communist Party’s desire to control the market and reduce costs. anti-competitive practices.

Alongside Didi, the SoftBank-backed platform that has dominated ridesharing in China since Uber exited the market in 2016, were smaller local rivals Meituan Chuxing, of e-commerce group Meituan, and Cao Cao Mobility. , the Chinese private carpool branch. car manufacturer Geely. Full Truck Alliance and Huolala were among the freight platforms at the meeting.

Didi, expected to be listed on the New York Stock Exchange later this year, has long had a strained relationship with authorities after a series of security incidents – and even murders – involving its drivers in 2018 led to stern warnings from the police and the shutdown of the company’s carpooling service.

Didi was again criticized by the Ministry of Transportation in March when drivers complained that the company had raised passenger prices without raising their wages appropriately.

Didi responded last week by pledging to be more transparent and released a cost breakdown per average order for 2020. He said drivers were getting almost 80% in most cases, but there was had a small number of “extreme” cases. , accounting for just 2.7 percent, where the company received 30 percent of the total cost of the trip, the group said.

Part of the government’s motivation to call the companies was to ensure social stability among the millions of drivers who made a living through Didi’s platform, Tao said. “In cities like Beijing, there are tens of thousands of drivers who know each other well and can organize protests,” he said. “The authorities want to avoid this situation.”

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