Shanghai stops accepting new ride-hailing drivers in overcrowded market

SHANGHAI, China’s financial hub, is to stop accepting applications for new ride-hailing vehicles, becoming the latest Chinese city to do so since May this year, as local media highlight oversupply in the market.

Interest in flexible working jobs, such as ride-hailing drivers and delivery riders, has surged in the past few years especially as the economy slowed and unemployment among certain groups, such as China’s youth, increased.

But Shanghai authorities said on Friday (Jul 21) they would suspend some capacity checks on drivers from Saturday that form part of the licence application process, and would stop accepting licence applications altogether from September.

The city’s fleet, including taxis, already numbers 126,000 they said.

Shanghai’s announcement follows similar licence application suspensions in other cities, including the beach resort city of Sanya and Changsha in southern China in May.

Other cities, such as Dongguan and Jinan, have also issued warnings of market saturation and advised drivers against joining the industry.

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Local media have also sounded warnings. The state-backed People’s Daily newspaper reported in June that the market faced excess capacity with many drivers seeing a lack of orders. In some cities, the average daily order volume for drivers had fallen below ten, it said.

The country’s largest ride-hailing services include ones run by Didi Global and Meituan. In April, Didi said its China mobility segment had 19 million annual active drivers as of the end of March. REUTERS