China’s Ministry of Transport (MoT) asked ride-hailing firms and online trucking platforms to set a reasonable cap on fees for drivers and disclose their pricing rules to the public, as reported by Caixin on February 24. The announcement came a month after China’s nine supervision departments published a guideline to regulate online platforms and call for reasonable and transparent pricing rules. Citing an officer from the MoT, the ministry will safeguard the labor interests by launching a campaign this year to oversee the online platforms’ income distribution mechanism.
China’s ride-hailing platforms commonly charge around 20% to 35% in commissions to maximize profits. However, Didi Chuxing, which occupies around 90% of China’s ride-hailing market, claimed that it paid drivers 79.1% of the revenue it gained from passengers in 2020. Of the remaining 20.9%, 10.9% were subsidies for passengers, 6.9% were operating costs, and 3.1% was net profit. The company has been burdened with regulatory pressure since last year. In July 2021, the company faced cybersecurity review from Chinese authorities following its public listing in the New York Stock Exchange (NYSE), forcing it to eventually delist from the NYSE. Then in September, the company faced an investigation for registering unlicensed drivers and vehicles.