Didi grapples with draft laws from China’s top cities
Didi Chuxing has suffered a bolt from the blue, as Beijing, Shanghai, Guangzhou and Shenzhen each rolled out specific and harsh regulations for the sector on October 8.
Didi Chuxing has suffered a bolt from the blue, as Beijing, Shanghai, Guangzhou and Shenzhen each rolled out specific regulations for the chauffeured service sector on October 8. The harsh rules have brought the car-hailing giant to its knees, arguing for possible remedy from the authorities.
The newly published draft interpretations from the largest Chinese cities have stipulated that drivers must of local Hukou, or family register. This is a heavy blow for Didi, as it eliminates more than half of the drivers in Beijing and Shenzhen, and dispels an overwhelming majority of Shanghai drivers from the platform.
The draft laws from these cities also raised the bar for cars in the business. Didi has stated that the higher standards would disqualify more than four out of five existing vehicles.
Artificially holding down supply would “more than double prices,” and the waiting time for rides would increase from the current average of five minutes to a whopping 15 minutes, warned Didi.
The rigid Hukou specification is perhaps the most fatal blow. “Of the 410,000 registered drivers in Shanghai, only 10,000 have a Shanghai Hukou,” Didi said in a statement. However, these figures may be exaggerated for Didi’s own convenience, as it fans its victimized image and threatens more severe consequences. Only 30 percent of Shanghai drivers were nonlocal, according to Didi’s “Mobile Transportation Employment Promoting Report” published last month, in which the company congratulated itself on its ability to attract local drivers who are better acquainted with roads.
More than 65% of drivers in Shenzhen and more than 50% of those from Beijing do not possess a local Hukou, the report found.
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