China issued its most comprehensive set of guidelines for the growth and expansion of its ride-hailing industry, a new blow to Didi Global Inc.
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The antitrust watchdog, transport ministry and public security bureau issued a formal package of rules Tuesday aimed at protecting the rights of millions of ride-hailing drivers that underpin the sector's growth. They ordered Didi and its smaller rivals to strengthen social insurance for drivers while adopting reasonable commissions. They warned against using data to take advantage of consumers. China will establish local-level supervisory offices staffed by personnel from multiple agencies before the end of the year, according to the guidelines.
The edicts enshrine and collate previous declarations, while offering an overarching guide for Didi as it grapples with regulatory scrutiny. Beijing has ordered the internet giant to delist from the U.S. while weighing punishments for a once-feted national champion that plowed ahead with a June IPO over official objections, Bloomberg News reported. Several agencies have dispatched officials to investigate the company and are considering a state-directed takeover, according to Bloomberg News in September.
Tuesday s guidelines muddy the waters further. The gig economy is powered by millions of contract workers, often without full employee benefits, and Beijing has made it a priority. The country s agencies are responding to Xi Jinping's goal of prosperity of getting rich and powerful corporations to share the wealth, in part to ensure social stability.
The Chinese regulators have cracked down on consumer data, which could affect its ability to grow its core mobility business and introduce new products, which has clouded Didi Global Inc.'s longer-term growth outlook. The domestic ride-hailing market in China is expected to double by the year 2025, which is a solid foundation for growth as long as Didi can navigate the regulatory situation. Its international ride-sharing business and other initiatives may burn cash at a rapid clip. None of the Wildfires Are Getting Worse, and One Chemical Company is Reaping the Benefits.