"Out of control": Chinese authorities criticize Didi for his safety

BEIJING: Chinese authorities on Wednesday announced a massive crackdown on the Chinese grimaces industry by recalling market leader Didi Chuxing, the market leader, following the deaths of two passengers in separate incidents. at the beginning of the year.

Didi has violated many safety rules, presenting a "major risk", including not properly reporting high-risk drivers and improperly handling deposits, said the Chinese Ministry of Transport in a statement posted on an official account of social media.

"The qualifications and the background checks of the driver are not in place.The management of people and vehicles of the company is out of control," said the ministry, citing Didi, which represents about 90% of the Chinese market.

The ministry said it would "severely crack down" on dishonest businesses that hire illegal drivers and fine Didi executives and legal representatives for an undisclosed amount.

Didi, backed by the Japanese group SoftBank Corp and Uber, has attracted a lot of social media criticism earlier this year after two women were assaulted and killed in separate incidents involving drivers using its carpool service, Didi Hitch.

In one of the incidents, the driver was able to bypass the security controls of the application of Didi to use the account of a member of his family, even though he had already been reported for harassment.

With nearly 30 million journeys a day, Didi is currently the world's second largest company behind Uber.

But it has recently struggled to counter the sharp increase in wait times in major Chinese cities, where residency restrictions imposed on drivers as part of a broader industry regulatory campaign have reduced number of trips available.

The ministry said that there remained a large number of illegal cars and that it would urge local authorities to target unskilled drivers, which could exacerbate shortages.

"Didi's service times have been drastically altered in the last few months after the removal of platform drivers who did not have local registration in the cities in which they drove," said Ben Cavender, director of China Market Research Group in Shanghai.

"The majority of consumers we talk to, who use carpool platforms, first used Didi, but are considering more and more options."

HITCH SUSPENDED INDEFINITELY

Didi's activities have already been affected by the suspension of his carpool service, announced by Didi as a way of meeting people. Authorities said Wednesday that Didi Hitch's suspension would be held indefinitely.

"As a young company, Didi still has to work on many shortcomings and imperfections that have been of concern to the public," said Didi CEO Cheng Wei in a statement.

"Even if the industry fails to completely eliminate criminal behavior or accidents, we will do our best to protect bikers and drivers."

To help restore consumer confidence, Didi announced plans to expand its in-house customer service team to 8,000 out of 5,000 people, as part of a broader upgrade of 140 million. yuan ($ 20.14 million).

Didi invests heavily overseas, particularly in South America and Australia, where she launched her own service and acquires local competitors during a fierce battle against Uber.

Since the purchase of Uber's activities in China in 2016, Didi has dominated the national horse racing market. But new rivals have begun to enter the fray, including a service backed by Meituan Dianping, the government seeking to reduce the industry's anticompetitive behavior.

(Report by Cate Cadell, edited by Christopher Cushing and Himani Sarkar)