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China summons DiDi & 10 other ride-hailing firms, issues deadline to rectify issues

By Yashasvini on Sep 03, 2021 | 05:33 AM IST

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Chinese regulators have summoned 11 ride-hailing firms including DiDi Global Inc and issued an ultimatum on Wednesday to fix certain issues by December 1, 2021.

China’s Ministry of Transport and other watchdogs including the Cyberspace Administration of China (CAC), the Public Security Bureau, and State Administration for Market Regulation (SAMR), jointly interviewed the companies including DiDi, T3, and Meituan, asking them to rectify non-compliant behavior.

The regulators alleged that the companies were hiring unlicensed drivers and vehicles, allowing illegal operations. South China Morning Post reported that the companies were told to purge vehicles and drivers that do not meet standards to ensure safety, improve drivers’ working conditions and protect data security.

Regulators listed their demands in front of all the platforms. They demanded necessary approvals for cars and drivers. They forbade enticing drivers to join through fake promotions or transfer any business risks to drivers.

Regulators also ordered ride-hailing platforms to ensure adequate rest for the drivers, reduce the commission taken by the firms, from each ride, 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.

There are roughly 236 ride-hailing apps in China, according to YicaiGlobal, and more than 3.51 million licensed drivers. A survey by People’s Daily Online reported that commissions to the platforms are 35% to 50% of each ride’s fare, with the drivers getting the balance.

Reuters reported that DiDi and Chinese e-commerce giant JD.com set up unions for their workers. Meanwhile, China’s tech crackdown continues with the Transport department stating that the latest measures are the government’s effort to “maintain a fair competitive market environment” and promote the “healthy and sustainable development” of the transport industry.

Picture Credits - Reuters

With inputs from CNBC

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