Investing.com – Didi Global ADRs (NYSE:DIDI) plunged more than 6% Wednesday on a Bloomberg report that the government in its home country, China, may regulate ride-hailing commissions.
The move, considered consumer-friendly, is unlikely to go down well with the company or its drivers.
The government’s plan only exacerbates the problem for the company whose app was ordered to be removed from app stores by Chinese regulators, pending a review of its data handling practices and security framework. Didi, along with several other apps, were told not to onboard new users.
The company had last month warned its revenue would suffer as a result of the Cyberspace Administration of China's order withdrawing 25 more of its apps from local app stores.
The apps targeted in the second round included Didi’s app for drivers offering rides through its platform, an app for corporate users and a financing app.
While the order on regulating ride-hailing commission is specific to the companies, recent orders by the Chinese authorities against its internet giants have unnerved investors. Edtech companies have been advised to go non-profit.
Tuesday, according to state media reports, President Xi Jinping advised China’s wealthiest citizens to work towards “common prosperity” that includes income regulation and redistribution.