ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter
China tech

China internet sector crackdown turns to ride hailing

Didi Chuxing and 9 rivals summoned by top officials over treatment of drivers

Chinese government agencies said Friday that they had received complaints about excessive and unclear commissions charged by ride-hailing apps.   © Reuters

HONG KONG -- Didi Chuxing and nine of its smaller ride-hailing rivals were summoned by top Chinese regulators on Friday over complaints about their business practices.

The sector is the latest part of China's online platform economy to be targeted by regulators amid an antimonopoly crackdown that pushed Alibaba Group Holding this week into its first quarterly loss as a public company and has silenced founder Jack Ma.

Online financial services companies, tutorial providers, food delivery services and online retailers have all come under scrutiny in recent weeks, with many fined and required to "rectify" their behavior.

On Friday, departments including the Ministry of Transport, the Cyberspace Administration of China, the National Development and Reform Commission and the State Administration for Market Regulation urged ride-hailing companies, including a unit of Hong Kong-listed Meituan, to be more transparent about the commissions they collect from drivers and to improve safety measures, according to a statement circulated to local media.

The agencies said they had received complaints about excessive and unclear commissions. Some customers had criticized the app operators for arbitrarily raising fees for premium memberships that give them favorable fares. The agencies also cited concerns that larger operators were unfairly exercising market power to underprice cargo delivery rates.

"The platform companies should face up to their problems, fulfill their corporate responsibility and rectify their practices immediately," the statement said. They were told to avoid overworking drivers but also to strengthen their background screening and training.

Earlier this month, the official Xinhua News Agency said that some app operators were taking commissions of as much as 50% of fares paid due to algorithms used in the companies' ambiguous payment arrangements.

Didi, the country's dominant ride-hailing service, responded with a post on the WeChat social network, saying that drivers on average receive 79.1% of fares paid, with the company only pocketing 3.1% after subsidies and operating costs. It said that in some "extreme cases," representing 2.7% of rides, the company's commission exceeded 30%.

"We will try our best to prevent such extreme cases from happening," Didi said.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends July 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more