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17 May Chinese Regulators Require Ride-Hailing Companies to Improve Labor Rights Protection
The Ministry of Transport (MoT), the Cyberspace Administration of China (CAC), the Ministry of Industry and Information Technology (MIIT), and five other departments jointly held a regulatory meeting on May 14 with ten online ride-hailing providers, such as Didi Chuxing, Meituan [3690:HK], and Huolala, as reported by The Paper on the same day. The ministries pointed out existing issues of these ride-hailing providers, including excessively high commissions, abuse of pricing rules, monopoly of freight information, etc. The regulators ordered the platforms to take immediate rectification measures, such as keeping drivers informed of commission rates, improving pricing mechanisms, guaranteeing reasonable income and working conditions for drivers, and more.
Prior to the regulatory meeting, according to a survey by Xinhua News Agency, the commissions of online ride-hailing service providers accounted for above 25% of the total amount paid by passengers, while drivers and passengers had no knowledge of their proportion and calculation method. Didi responded to the survey and announced the platform’s commission rules on May 7. It showed that in 2020, drivers’ income accounted for 79.1% of the total amount of passengers’ payments, while the net profit of the platform only accounted for 3.1%. Although certain Didi orders portion a lower percentage of the payment as drivers’ income, orders with a commission rate of more than 30% only accounted for 2.7% of total orders. In addition, Didi stated that it would continue to promote transparent pricing mechanism and actively listen to drivers’ feedback. According to China’s regulations on ride-hailing platforms, platforms can adjust prices according to market demand. Some experts believed that the government should consider strengthening supervision of the platforms through anti-monopoly measures and protection of drivers’ rights and interests.