Shanghai's traffic law enforcement department has ordered Didi Chuxing to take action against taxi drivers who use a loophole on the app to cherry-pick customers.
In December, the authority issued a rule urging online car hailing apps to block passengers' destinations before orders were accepted, a move aimed at preventing cherry-picking.
However, after an order is accepted, the authority said, many drivers could then see the destination and, by selecting the "paid with cash" option, the system would consider the order completed even though the passenger had never been picked up.
"It is considered as cheating and cherry-picking," said the authority's Xu Feng during talks with Didi Chuxing on Friday.
Didi Chuxing revealed that the number of "paid with cash" orders had increased by 30 percent on December 19, the day the new rule took effect.
The number of such incidents was now five times the number before the rule, according to Huang Xiurong, Didi's head of passenger experience.
Most passengers who order taxis via the Didi app prefer to pay online. "They usually won't use Didi if they have only cash," said Ni Guochang, a Qiangsheng taxi driver. "Some passengers don't even know they can pay me cash with trips ordered on Didi."
Shen Lei, who was left standing at the junction of Julu Road and Shaanxi Road S. after his latest order was marked as complete, said: "It was already quite hard to order a taxi on Didi after the drivers couldn't see the passenger's destination. Now they can simply stand me up."
The same situation had happened to him twice the week before with his orders marked as complete and no taxis in sight. He reported the incidents to Didi Chuxing but, so far, has not had a response.
A Jinjiang taxi driver surnamed Zhang told Shanghai Daily that if a driver cancels a trip after accepting an order, the platform will penalize the driver.
"The driver's account will be temporarily banned by the platform if he is penalized more than three times," Zhang said. "But using the loophole, the system won't judge."
Zhang said Didi Chuxing does not charge taxi drivers. "Drivers of Didi's express and premier ride-hailing service have to pay Didi according to their income," said Zhang. "But not us, we only pay shares to our taxi firms."
Another taxi driver surnamed Liu said that since Didi is not taking money from taxi drivers, they don't care how the trips on the app are paid.
Hu Gang, a taxi driver from Dazhong said he often found a passenger who ordered a car was too far away and the trip too short. He had to "complete" the trip otherwise he would be losing money.
"I have to waste my time and drive a distance which could be longer than the trip to pick them up," Hu said. "I learnt this from a fellow driver."
Didi Chuxing has been ordered to fix the loophole and provide a list of drivers who have stood passengers up using the "paid with cash" option.
Didi has promised changes to the app before March 15 to stop the abuse, said Wang Xufeng, an officer with the city's traffic authority.
Huang said Didi will ban a driver's account permanently if the driver is proved to have used the loophole to stand passengers up.
Wang told Shanghai Daily they will clamp down hard on this "new type" of cherry-picking. Once a complaint is verified, the driver will be fined 200 yuan () and suspended for 15 days. If caught twice in a year, the driver's taxi certificate will be revoked and the driver will be banned for at least five years.
Didi's own punishments have been criticized as weak as drivers would only be suspended for periods from one day to a week.
Jin Kai, Didi Chuxing's head of governmental affairs, said they would lose drivers if Didi increased the punishments.