Benzinga | Sep 2, 2021 07:51AM EDT

Key Takeaways From Chinese Regulatory Summon Of DiDi, Alibaba

* Chinese regulators ordered car-hailing services run by DiDi Global Inc (NYSE:DIDI), Meituan (OTC:MPNGY), and Alibaba Group Holding Ltd (NYSE:BABA) to rectify instances of misconduct by December, Bloomberg reports.

* The Ministry of Transport and multiple regulators, including the Cyberspace Administration of China and State Administration of Market Supervision, summoned and interviewed 11 ride-hailing firms for alleged hiring of unapproved drivers and vehicles, CNBC reports.

* The regulators also rebuked the players for disrupting fair competition, user data protection anomalies, and hurting the interests of drivers and passengers.

* The companies have to carry out self-inspections, fix those issues, and draft compliance plans before the end of the year.

* The regulators forbade the ride-hailing platforms from enticing drivers through fake promotions or business risk transfer.

* They also sought drivers' adequate rest and asked companies to reduce the commission per ride.

* The companies have agreed to follow the regulatory orders. The regulators had already stopped Didi from signing up new users in July.

* Various ride-hailing competitors tried to entice users with attractive discounts to dent Didi's 90% market share in China.

* Price Action: BABA shares traded higher by 2.66% at $177.89, and DIDI stock is down 1.09% at $9.10 in the premarket session on the last check Thursday.