China to Root Out “Illegalities” Among Ridehailing Companies

Zheping Huang, Bloomberg News

The Didi ride-hailing app on a smartphone arranged in Beijing, China, on Monday, July 5, 2021. China expanded its latest crackdown on the technology industry beyond Didi to include two other companies that recently listed in New York, dealing a blow to global investors while tightening the government’s grip on sensitive online data. , Bloomberg

(Bloomberg) -- China will step up oversight of its ride-hailing and on-demand trucking companies from Didi Global Inc. to Full Truck Alliance Co., adding to a widening campaign by Beijing to rein in its internet sector.

Some firms in the industry are currently operating irregularly and disrupting fair competition, the transport ministry said in a statement Friday that didn’t identify any specific firms. Companies must protect the rights of drivers, root out illegal cars and drivers and also strengthen data security management.

The statement is the latest in a series of pronouncements by Beijing on the tech industry. In the past week, the internet industry regulator, antitrust watchdog as well as the State Council have issued statements or new regulations concerning everything from after-school tutoring to illegal internet activity and food delivery.

Read more: Why China Is Cracking Down on its Technology Giants: QuickTake

Didi, the country’s largest ride-hailing firm, as well as Full Truck Alliance are currently being probed by the Cybersecurity Administration of China for data security.

In the prospectus for its troubled U.S. listing, Didi had warned that the company could face penalties if its vehicles or drivers didn’t have required licenses or permits. Shares of the Beijing-based company were down about 4.7% in pre-market trading.