(Yicai Global) April 13 -- Beijing Sankuai Online Technology Co., the firm behind China’s largest on-demand services provider Meituan Dianping, will slash subsidies for its ride-hailing users after regulators ordered it to end an ongoing price war with rival Didi Chuxing.
The company will cease to offer unfair low prices and cap subsidies at CNY4 (USD0.64), it said in a statement yesterday. It had earlier promised not to charge drivers usage fees during its first three months in Shanghai, where it began operating at the end of March, and to offer discounts of between CNY5 and CNY10 for every order.
The offer led to a large number of non-compliant drivers and vehicles plaguing China’s largest city, forcing the platform to shut down 1,161 driver accounts between April 7 and 11. It is also offering up CNY100 (USD16) as a reward for riders who blow the whistle on non-compliant chauffeurs, and plans to heighten verification by making drivers upload their license, identification card and vehicle information.
Meituan trialed its ride-hailing services in Nanjing, Jiangsu province in February 2017. The move into Shanghai was its first foray out of the city, where it offered huge discounts to take on Didi Chuxing Technology Inc., the world’s largest ride-hailing operator which drove United States-based Uber Inc. out of China in 2016 and commands a 90-percent share of the domestic market.
Editor: James Boynton