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China to launch state-owned ride-hailing platform

Written by Nikkei Asia Published on   3 mins read

Move is response to ‘disorderly expansion and data security problems’ in sector.

China will launch a state-owned transportation platform that includes ride-hailing and flight services, state media has announced, as Beijing continues to keep a tight grip on the country’s tech sector.

Qiangguo Jiaotong, which translates literally to “The Strong Country’s Transportation,” has completed internal testing and will soon launch its ride-hailing service for the public, Beijing Daily said on Wednesday.

The platform 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, according to the report.

The platform will be connected to WeChat, Alipay, and Douyin, TikTok’s Chinese version, the newspaper said. WeChat is run by Tencent Holdings, while Alipay is the payment app of Ant Group, the financial arm spun off from Alibaba Group Holding.

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. The Financial Times reported earlier this week that the Chinese government is considering taking “golden shares” in Tencent and Alibaba.

On Wednesday, China’s top cyber watchdog launched a monthlong campaign to crack down on “misbehavior” in the cyberspace during Lunar New Year, including content that shows displays of wealth, people upset over factories being closed down, or excessive celebrity gossip, as well as posts about the “dark side of society.”

The news also comes just two days after ride-hailer Didi Global announced it had received the green light from Beijing to register new users for its app after an 18-month freeze. However, as of Wednesday evening, its main app, Didi Chuxing, was still not available for download in app stores.

Didi, which previously controlled around 90% of China’s ride-hailing market, went public in New York in June 2021, despite Beijing’s warnings that “rushing” to list could give American regulators access to sensitive domestic data. Chinese regulators launched a probe into Didi immediately after its listing, pulled its 26 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. It has said it is considering a listing on another exchange, including in Hong Kong, though it is not clear on what conditions the Chinese regulators would allow Didi to pursue a new listing elsewhere.

After the delisting, Didi was also slapped with RMB 8 billion (USD 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%.

This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.


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