Ride-hailing firms get dressing-down, told to clean up act

Bloomberg

Chinese regulators ordered car-hailing services run by Didi Global, Meituan (3690) and Alibaba Group Holding (9988) to rectify instances of misconduct by December, amping up scrutiny over an industry that employs millions.

Officials from the transportation ministry and other departments summoned executives from 11 companies - including Didi, Meituan and Alibaba's ride-sharing and navigation unit Amap - and criticized them for disrupting fair competition and hurting the interests of drivers and passengers, according to a statement published yesterday.

Regulators highlighted violations including recruiting unlicensed drivers and the need to strengthen user data protections. Some companies used "vicious" competition and undermined the safety and stability of the industry.

The 11 firms were required to carry out self-inspections, fix those issues and draft compliance plans before the end of the year, according to the statement.

Meituan shares pared their gains after the notice and were little changed in Hong Kong. Alibaba's Hong Kong shares rose 2.7 percent, while Didi's stock trades in the U.S.

The sudden removal of Didi's ride-hailing apps in July - the result of an investigation into data privacy violations - has energized rivals who see a rare opportunity to chip away at a leader holding 90 percent of the market. Didi is now helping workers establish their first union, a groundbreaking decision its fellow tech giants may soon follow as China imposes rules to curb excessive work and protect millions of blue-collar workers from exploitation.