Caixin
Jan 28, 2022 06:03 AM
TECH

Transportation Ministry to Intensify Pressure on Ride-Hailing Industry

What’s new: China’s Transportation Ministry vowed to speed up regulatory compliance by online ride-hailing companies and take resolute measures to punish companies that fail to comply.

In a ministry meeting Thursday to conclude its 2021 work and plan for 2022, the ministry said it will make coordinated use of means including meetings, exposure, law enforcement, penalties and credit supervision to urge local governments and major ride-hailing platforms to formulate compliance plans and speed up the process.

The ministry will also implement new rules for protecting the rights and interests of workers in the sector by improving income distribution mechanisms between platforms and workers, supporting workers’ participation in social insurance and improving their working environments and conditions.

The background: Since ride-hailing giant Didi Global’s main app was removed from app stores July 9 for cybersecurity review and other regulatory issues, China’s regulators have stepped up scrutiny and compliance requirements for the industry.

In September, five ministries summoned 11 ride-hailing platforms including Didi and pressed them to meet the requirements by year-end. Didi’s compliance rate was 43%, lower than that of most competitors, Caixin learned.

On Nov. 30, the Ministry of Transport and eight other ministries issued guidelines, urging ride-hailing firms to be more transparent about pay, give drivers a larger share of profits, provide them with social insurance coverage, give them adequate time to rest, and provide an effective feedback platform.

Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full story in Chinese, click here.

Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bob.simison@caixin.com)

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