China suspends Didi's new ride-hailing service Huaxiaozhu

Local city regulators in China have asked Didi Chuxing to suspend its new standalone ride-hailing service, citing a lack of operating licenses for the platform in their regions.

A Didi sign is seen on a car in Beijing. (File photo) (REUTERS)
A Didi sign is seen on a car in Beijing. (File photo)

Didi, China's biggest ride-hailing company and backed by Japan's SoftBank, in July launched a new service named "Huaxiaozhu" that targets younger customers and offers cheaper rides compared to its main app.

The eastern city of Hefei said on Wednesday on its website it has asked Huaxiaozhu to stop operating in the city as it did not obtain all the required licenses to offer ride hailing service.

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In coastal Tianjin city, transport regulators in July said in a social media post on their official Weibo account that Huaxiaozhu should suspend service, until they update the business status and connect its data with the regulator.

Transportation officials in eastern Nanjing city told local television this week they found several drivers who worked for Huaxiaozhu platform operated without a license and some cars failed to meet requirements for ride hailing service.

In Qingdao, transportation regulator said in a Weibo post it would fine Huaxiaozhu platform as it does not have a license for ride hailing service in the seaside city. Nanjing and Qingdao authorities did not say whether they would shut down the service in their cities.

China is home to the world's largest ride-hailing market and authorities are developing rules to regulate the industry.

Authorities suspended Didi's hitch carpooling service in 2018 following the murder of a female passenger by her Didi driver. Didi later rolled out new improved safety rules and relaunched the service.

In a statement, Didi said it will continue to work closely with authorities, and provide safe and affordable services to users.

Didi launched new delivery and logistics services this year in an expansion of its operations in China with its CEO Cheng Wei setting a goal of completing 100 million orders a day and reaching 800 million monthly active users globally by 2022.

Outside of China, Didi also operates ride hailing services in places like Japan,Australia, Russia and several South American countries. Its daily global orders reached 50 million trips a day for the first time on Aug. 26.

First Published Date: 27 Aug 2020, 17:13 PM IST
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