Beijing regulatory agencies reprimanded ride-hailing platform Dida Chuxing for resuming inter-city services to and from Beijing as the current novel coronavirus outbreak lingers on.
Why it matters: The spread of the Covid-19 virus has drastically constrained business for Chinese ride-hailing platforms. Regulators halted the service in more than 50 cities after the outbreak.
- The number of daily active users for China’s biggest mobility service provider Didi Chuxing cratered during the Spring Festival holiday, more than halving on an annual basis between Jan. 20 to Feb. 13, according to the latest figures from Chinese research firm Aurora Mobile.
Details: Beijing regulators reprimanded ride-hailing platform Dida for offering inter-city rides to and from the nation’s capital. Dida has since halted the service, according to a statement from the city’s Commission of Transport and obtained by Chinese media on Friday.
- Meanwhile, the Didi rival was fined RMB 150,000 (around $21,500) for running the service with unqualified drivers. China began requiring all ride-hailing vehicles and drivers register for specific permits in order to operate on Jan. 1, 2019.
- A notice from the Ministry of Transport followed a day later, which underlined government restrictions on all inter-city ride-hailing services to and from both Beijing and Wuhan.
- The government agency did not give a timeframe for the ban, and stressed that the safety and stability of Beijing has a direct bearing on the leadership of the central government, warning that the penalty would be severe to violators including removal from Chinese app stores.
- Dida did not respond to requests for comment on Monday.
- Toyota-backed Didi said it suspended inter-city rides in Beijing beginning Jan. 26, as required by the local government. It did not say when it would restart the service.
Context: Other than Beijing and Wuhan, the epicenter of the virus outbreak, local governments have started to ease limits on public transit to support the country’s millions of workers returning to work.
- The Ministry of Industry and Information Technology in mid-February called for more concerted efforts to support work resumption especially from internet-connected transport services and freight deliveries in order to restore traffic and maintain supplies.
- Ride-hailing has since reopened in a dozen Chinese cities including Xi’an, capital of northwestern Shaanxi province, and the southwestern municipality of Chongqing, according to a statement Dida released on Thursday.
- China’s second largest ride-hailing platform, Dida falls well behind Didi in size. It records upwards of 3.65 million rides per day, around one-tenth that of Didi, according to an investor document cited by Bloomberg early this year.
- Dida’s user base declined 8% sequentially to 5.19 million monthly active users (MAU) as of January. Its MAU count is about one-fifth the size of Didi’s, figures from Chinese mobile internet research firm Trustdata show.