China to demand ride-hailing fee caps, transparency this year

The plan to rein in commissions and offer more transparency was signalled in guidelines issued in November by several government agencies and mirrors Friday’s request for food-delivery services to also cut fees. — AFP

Ride-hailing firms and online trucking platforms in China will have to set reasonable caps on their fees and make their pricing rules public this year, according to Wang Xiuchun, a senior official at the Ministry of Transportation.

The plan to rein in commissions and offer more transparency was signalled in guidelines issued in November by several government agencies and mirrors Friday’s request for food-delivery services to also cut fees. President Xi Jinping’s “common prosperity” agenda has prioritised helping small businesses and individual operators, such as ride-hailing drivers, to navigate the challenges of the pandemic, which has increasingly come at the cost of big Internet service operators.

Didi Global Inc and Full Truck Alliance Co will likely be the two companies most immediately impacted by the move, as the domestic leaders in their respective spheres. Both were listed on US markets in the summer, though Didi is now working on a Hong Kong listing because of government concerns about the security of its user data.

Worries about a revival of China’s broad regulatory crackdown has in recent days wiped billions off the value of the country’s biggest tech companies, such as Alibaba Group Holding Ltd and Tencent Holdings Ltd. Investors remain wary about the depth and extent of Beijing’s latest push to rein in private enterprise and profits. – Bloomberg