China's Antitrust Watchdog May Punish Didi for Safety Violations, Professor Says
Qian Tongxin
DATE:  Aug 28 2018
/ SOURCE:  Yicai
China's Antitrust Watchdog May Punish Didi for Safety Violations, Professor Says China's Antitrust Watchdog May Punish Didi for Safety Violations, Professor Says

(Yicai Global) Aug. 28 -- China's car-hailing giant Didi Chuxing could have made its hitching service safer to avoid the past months' assaults but due to Didi's monopoly position after buying out Uber from the Chinese market, it has not done so, a university professor who has specialized in antitrust research for long said.

"These incidents could have been avoided through improving hitch services and establishing standards," the professor, speaking under the auspices of anonymity, told Yicai Global. "However, due to its monopoly, Didi can just abstain from improving its services even when facing quite severe criminal cases, because it has no pressure."

A female passenger was murdered in Wenzhou in China's eastern Zhejiang province at 1.00 p.m. on 25 Aug. The driver confessed to the rape and murder. This marks the second fatal assault during Didi's carpool rides since May. 

Didi, which is backed by Alibaba Group Holding and Tencent Holdings, holds 80 percent of the market share, according to consultancy Roland Berger. Homegrown rival Meituan-Dianping's ride-hailing platform Meituan, which has kicked off services in Shanghai in March, has not succeeded in combating the giant yet, but it plans to expand to several Chinese cities, including Beijing, Chengdu, and Hangzhou.

One way for the Ministry of Commerce to punish the Beijing-based ride-sharer would be giving a verdict on the ongoing antitrust investigation. The regulator can decide to punish against an abuse of monopoly that causes damage to consumers' rights and interests based on the Article 17 of Anti-Monopoly Law, the university teacher added.

The antitrust investigation started, partly on China Taxi Industry Alliance's request, after Didi announced a merger with its US rival Uber in August 2016. "The Anti-Monopoly Bureau of MOFCOM has had rounds of interviews with Didi and an investigation on its purchase of Uber's Chinese operations is underway," the ministry said in July last year in its latest comment of the issue. MOFCOM should usually finish its review within 180 working days.

Future will show if such legal means could improve ride-hailing safety as even if the regulator confirmed Didi's monopoly, it would result in a fine of CNY500,000 (USD73.4 million) at most, which is a drop in the bucket for the car-sharer that is valued at USD56 billion.

Editor: Emmi Laine

 

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Keywords:   Didi Chuxing,Ride-Hailing,Antitrust,Monopoly,Meituan,CRIME,Uber