China to Launch State-Owned Ride-Hailing Platform

China to Launch State-Owned Ride-Hailing Platform
Photo: unsplash.com 19.01.2023 77

China will launch a state-owned transportation platform that includes ride-hailing and flight services. The move is response to 'disorderly expansion and data security problems' in the sector.

The platform Qiangguo Jiaotong was jointly established by Xuexi Qiangguo, a web and mobile platform set up to disseminate President Xi Jinping's philosophy, and the Ministry of Transport. The platform has consolidated the services of dozens of ride-hailing companies and is expected to eventually gain more than 90% of the ride-hailing market.

The platform will be connected to WeChat, Alipay and Douyin, TikTok's Chinese version.

The state-owned platform was set up in response to the "disorderly expansion and data security problems" in the ride-hailing industry, Beijing Daily said, and it will first provide ride-hailing services to existing Xuexi Qiangguo users. It will also provide customized travel services for employees of key state-owned enterprises and institutions to "maximize the protection of user data security and personal privacy."

It is not clear if the platform will only consolidate these private apps, or if it will also introduce its own ride-hailing services.

Beijing's move comes as the state appears to be exerting greater influence over the booming private sector with cutting-edge technologies. Earlier this week, it became known that the Chinese government is considering taking "golden shares" in Tencent and Alibaba.

The news also comes just two days after ride hailer DiDi Global announced it had received the greenlight from Beijing to register new users for its app after an 18-month freeze. 

DiDi, which previously controlled around 90% of China's ride-hailing market, went public in New York in June 2021, despite Beijing's warnings.Chinese regulators launched a probe into Didi immediately after its listing, and pulled its 25 apps from app stores and blocked all of them from taking on new customers. DiDi delisted its shares after an 11-month wild ride on the New York Stock Exchange in June. After the delisting, DiDi was also slapped with an 8 billion yuan ($1.18 billion) fine for breaking data security and personal information protection laws and ordered to "rectify" its data-collection practices.

Over the past 18 months, DiDi has seen customers trickle away to rivals, and its domestic market share has reportedly dropped from 90% to below 70%.

Source: Nikkei AsiaChina Daily

digital markets  China 

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