As part of current attempts to curb taxi shortages in Shanghai, the city's transportation officers ordered ride-hailing firm Didi Chuxing to remove an option within its app that allows passengers to provide tips for drivers prior to pick-up.
Didi, which expanded further by purchasing ride-hailing giant Uber's Chinese operations back in Aug. 2016, is enjoying near-monopoly status in China's ride-hailing business. Quartz reported that the firm has since raised fares, decreased drivers' incentives, and gave lesser discounts.
Nonetheless, Didi enjoys a vaunted status for transportation convenience in China, despite serving as a disruption to Shanghai's taxi market. But the ban on the firm's tip provision function served as a blow to efforts at ensuring the steady flow of taxis within China's largest city, Shanghai Daily reported.
The ban on Didi's tip collection adds to its current problem from a new regulation in Shanghai, which restricts them to including only local drivers with locally registered vehicles in their operations. The firm said that only 3 percent of its 410,000-strong drivers have a "hukou," a document that certifies them as locals.
Speaking on the ban, the Shanghai Consumer Rights Protection Commission found that Didi's tip collection violates regulations that prohibits fare negotiations for taxis. Said rule, the commission emphasized, helps stabilize the taxi market against providing due preference for passengers willing to pay more.
But with all the talk about maintaining fair competition in Shanghai's taxi market, Didi's difficulties add more to the strain inflicted by the annual Chunyun during the Chinese New Year holiday. Taxis become harder to come by during that period, leaving passengers under the mercy of selective taxi drivers.
With the departure of several drivers from Didi due to the restrictions, the need to supplant the taxi shortage in Shanghai has become even more compelling. Additionally, the fact that taxi drivers continue to pick passengers over preferences on destinations shows that enforcement of regulations remain weak.