On Monday, the China Consumers Association (CCA) announced in a notice that it would clarify the responsibilities of online ride-hailing platform aggregators and enhance the protection of consumers' rights from the supply side. This notice is a supplementary measure to the management of online ride-hailing platforms issued by the national five ministries in April.
In addition to stricter regulatory measures, online ride-hailing platform aggregators and their partner companies are required to implement cyber security precautions, strictly protect and manage data security, and take effective measures to prevent personal information leakage, damage, or loss. The CCA stated that it will strive to regulate business practices, maintain a market order of fair competition, effectively ensure the industry's safety and stability, and protect the legal rights of passengers and drivers.
Online ride-hailing platform aggregators refer to platforms that rely on internet technology to cooperate with online ride-hailing companies, match passenger supply and demand information, and jointly provide online ride-hailing services.
Recently, regulatory authorities in many cities have held talks with online ride-hailing platforms, demanding they clarify pricing and remove non-compliant vehicles from their services. For example, the Shanghai Municipal Transportation Management Bureau recently announced that since August 14, it has held talks with 18 online ride-hailing platform companies, including DiDi Chuxing and Gaode Taxi.
The Shanghai Municipal Transportation Management Bureau stated that by the end of 2023, 80% of the vehicles on the DiDi Chuxing platform in Shanghai should be compliant. According to this standard, DiDi needs to remove 25,000 non-compliant vehicles in Shanghai.
Since the second half of 2022, online ride-hailing platforms have been engaged in a "price war" to gain a larger market share. At the same time, the relaxation of entrance control regulations further increased the number of non-compliant vehicles registered on the platforms, harming the interests of compliant drivers.
The latest data show that as of June 30, 2023, a total of 318 online ride-hailing platforms in the country have obtained business licenses, an increase of 5 over the previous month. According to data from the Ministry of Transport, by the end of June, a total of 5.79 million online ride-hailing driver licenses and 2.434 million online ride-hailing vehicle permits had been issued. In June, the online ride-hailing regulatory information exchange system received a total of 763 million orders, of which 218 million came from online ride-hailing platform aggregators.
However, affected by factors such as the weak outlook for China's economic growth and increasing unemployment pressure, the number of people looking to join the online ride-hailing workforce is rising, and the demand for online ride-hailing services may also decline as a result. Before this year, many unemployed people saw online ride-hailing as their last resort. However, with stricter regulation and declining demand for online ride-hailing services, the Chinese online ride-hailing industry is entering a low period.
