(Yicai Global) March 19 -- China’s two biggest on-demand food delivery platforms Meituan and Ele.me are in hot water with regulators in Hefei, eastern Anhui province for providing services to caterers that do not have valid business licenses, Red Star News reported yesterday.

Third-party platforms in the online catering business are obliged by law to ensure that all restaurants and delivery personnel that they use are fully licensed, an official from the Comprehensive Planning Office of Market Regulation of Hefei city said.

The case is currently under investigation and penalties will be imposed at a later stage, it added. Meituan and Ele.me have yet to respond.

Beijing-based Meituan was already slapped with a maximum fine of CNY1.5 million (USD230,000) earlier this month by authorities for predatory pricing and monopolistic practices. Both Meituan and Shanghai-based Ele.me have been repeatedly warned by authorities to abide by the rules.

China’s takeout sector, which boasts 500 million customers, had delivered a total of 17.12 billion orders as of the end of 2020, amounting to a transaction scale of CNY835.2 billion (USD128.1 billion).

Editor: Kim Taylor