China to Strengthen Oversight of Ride-Hailing Industry

What’s new: China will strengthen oversight of the online ride-hailing industry, according to a joint notice issued by eight departments including the Ministry of Transport.

Local regulators are required to strictly control entrance to the industry, urging ride-hailing companies not to allow drivers and vehicles lacking the required licenses to operate on their platforms.

Ride-hailing platforms that have incurred serious violations — such as endangering network and data security, violating users’ personal information privacy and disrupting social order — and that refuse to rectify their actions could be ordered to suspend operation or remove their apps from app stores, the notice said.

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.

Last month, the Transport Ministry vowed to speed up regulatory compliance by online ride-hailing companies and take measures to punish companies that fail to comply.

In a meeting 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.

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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