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Meituan summoned by authorities as it launches ride-hailing service in Shanghai
Meituan, China’s group-buying website and e-commerce giant, rolled out ride-hailing service in Shanghai on Wednesday but was soon summoned by Shanghai city authorities (in Chinese) on the same day and warned to adhere to local regulations.
To further take on Didi, the dominant ride-hailing player, Meituan has employed low pricing policies and advertisements as it prepares to enter the sector by triggering a pricing war. It has placed advertisements with wordings like “hail a ride for only one yuan.”
Shanghai city authorities, however, are not so tolerant regarding the matter. The city’s public transport, police, and pricing supervision authorities warned Meituan on Wednesday that the firm failed to link the data of vehicles and staff to the city’s supervision platform of online ride-hailing businesses, as reported by local media. Also, local regulations require all registered vehicles and staff to obtain relevant licenses issued by Shanghai city authorities.
On top of that, the authorities also warned Meituan to employ a proper pricing strategy and must specify the pricing. The firm must not operate with lower-than-cost pricing, and advertisements must not include wordings like “hail a ride for one yuan” or “hail a ride at a low price.” Meituan was also prohibited from adding “thank you fees,” tips that add onto the regular charges.
TechNode reached out to Meituan but they declined to comment. Currently, Meituan’s ride-hailing service is still in operation.
Shanghai is the second city for the company to launch its ride-hailing service after rolling out in Nanjing last December. Other cities that Meituan are potentially launching include Beijing, Hangzhou, and Chengdu.
It’s worth noting that Didi, Meituan’s major rival in the ride-hailing sector, has been planning a foray into Meituan’s home turf—food delivery services—as early as last December. It has reportedly been engaged in the R&D of food delivery service.