Ride-Hailing Company Didi Could Cede Control to City of Beijing

On the heels of a crackdown on ride-hailing companies in China, Beijing’s local government has suggested investing in Didi Global Inc. to wrestle control away from the company, according to a Friday (Sept. 3) Bloomberg report.

As part of the exploration, Shouqi Group, which is part of the Beijing Tourism Group, would join other companies based in the capital in purchasing a stake in Didi. The report did not disclose how large of an ownership stake is being sought.

Friday’s news follows this week’s PYMNTS report that Didi and other ride-hailing companies in China are at the center of a crackdown. The country’s Ministry of Transport has ordered Didi and the 10 other app-powered platforms to halt unfair practices, giving a deadline of year’s end to resolve the problems. Among the corrective measures cited, Didi and other ride-hailing companies must conduct self-inspections and develop compliance plans.

Read more: Didi, Meituan Among 11 Ride-Hailing Firms Ordered to Fix Problems in China

Regulators had alleged that the platforms seek unqualified or unlicensed drivers, placing a greater risk on drivers. In addition, regulators demanded that ride-hailing companies reduce their portion of profit per transaction, as commissions range between 35 and 50 percent. Regulators also ordered the firms to protect passengers’ private information.

Didi, which has almost 90 percent of the ride-hailing market share in China, was in negotiations as of last month to give control of its data to Westone Information Industry Inc., a firm owned by the country’s government, as PYMNTS reported. Didi collects data about car locations and trips, sharing reports that detail when workers in certain cities end their workdays and which companies have the longest hours. The company’s discussions with Westone were aimed at appeasing government regulators that want to protect sensitive data.

See also: Report: China’s Didi May Let Government-Owned Firm Manage Data

Didi had 493 million active users and 15 million annual active users and saw 41 million average daily transactions in the 12 months through March 2021, according to PYMNTS.