China'sdominant car-sharing company Didi Chuxing was ordered yesterday to remove a function on its app for people to tip taxi drivers in advance to secure a ride.
The city's transportation authorities said the function was unfair and disrupted the taxi market. Didi has been given two weeks to remove the function, which it set up in 2012.
The order — jointly inssued by the city's transportation commission, traffic law enforcement team and price supervision authority — follows a public outcry that erupted at the weekend both over Didi's app and complaints that hailing taxis in the city had become extremely difficult ahead of the Spring Festival holiday.
The problem has been compounded by a new regulation in Shanghai, which became effective last month, restricting Didi to only using local drivers and locally registered cars.
Didi has claimed that less than 3 percent of its 410,000 drivers in Shanghai have a local hukou (household registration) that would allow them to continue picking up passengers via the platform. Didi said it would obey the order but insisted technical issues meant it would take up to two weeks to carry it out.
The commission said Didi must comply with regulations that ban price negotiations before hailing a ride.
Shanghai Consumer Rights Protection Commission condemned Didi's app. "The priority of using taxis is given to those who pay more, which disrupts the market order and is very unfair," said Tang Jiansheng, the commission's deputy secretary-general.
The commission received 959 complaints on Internet-based car-hailing services last year, up sixfold from 2015. Most of the complaints involved passengers being unable to hire a taxi unless they agreed they would add tips. The taxi-hailing app suggests paying up to 50 yuan on top of the fare to ensure getting a ride. The tip would encourage drivers to accept a cab-hailing order "during peak hours or bad weather."
Zhang Hui, a Shanghai passenger, complained to the consumer protection commission that he had spent over two hours trying to hail a taxi, and finally succeeded after he agreed a tip of 100 yuan (US.70).
He wanted to hail a taxi at People's Square at 11:15pm on January 13, traveling to the Dahua area of Baoshan District, a journey of about 8 kilometers.
Online postings and complaints started to circulate over the weekend that taxi rides were becoming difficult to get despite paying 10 or 15 yuan as a premium. Some online users said they had to pay two or three times the normal price to hail a taxi online through Didi.
For those who cannot access the application, such as the elderly or hospital patients, trying to hail a cab on streets had become increasingly harder, complainants reported.
A taxi driver, surnamed Xia, said "there used to be many disqualified private cars operating as taxis via ride-hailing platforms, but as (a result of) the new rules on the service launched last month, many disqualified drivers left the market." Xia admitted some taxi drivers would cherry-pick orders based on the requested destination or what tips were offered in advance.
Ling Kang, senior director of Didi's government affairs division, said the company never forced passengers to give drivers tips, it just suggested the practice as a way to motivate drivers to respond to calls.
"The key problem is that taxis in Shanghai are in short supply," he said, adding Didi would cooperate with the authorities.