Didi’s Ride-hailing Business May Be Suspended for Employing Unqualified Drivers
COVID-19 and China
Didi building. Image credit: Didi website

Shanghai’s transportation department reported on its Wechat official account that unqualified ride-hailing drivers of Didi accounted for more than 82% of its total number of drivers from August 11 to 14. The company’s Shanghai branch was therefore fined USD 14,444. This is Shanghai’s second round of investigation into ride-hailing platforms.

On June 13, a ride-hailing driver fled from the scene of a car crash, and city regulators have since ordered the company to begin an internal investigation and remove all drivers without the required ride-hailing qualifications by the end of the month. Relevant authorities conducted intensive inspections of 14 ride-hailing platforms in July, and Didi was fined USD 783 thousand during the period.

The authorities enacted ride-hailing regulations in 2017 that requires only drivers with operating permits and ride-hailing licenses are able to work on those platforms. According to regulations, if ride-hailing platforms decline to or cannot rectify illegal operations, their online mobility service operations will be suspended.

Didi’s adjustment was not pushed forward smoothly. Grabbing qualification of working on ride-hailing platforms directly raises drivers’ input costs, making it an unfair deal for drivers.

Despite being fined drastically, Didi does not remove all unqualified drivers, under the enormous pressure of driver shortage. The tradeoff between regulations and driver shortage is greatly challenging Didi currently.

Last year, Didi suspended its Hitch ride-sharing service indefinitely after two women were murdered in separate incidents by Didi drivers.

If Didi declines to remove all unqualified drivers and vehicles, its passengers will confront safety risks. However, if it does so, Didi will see a sharp decrease in its service supply.

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