(Yicai Global) Aug. 20 -- Yidao YongChe will abandon the commission model after Chinese regulators moved to limit how much ride-hailing platforms can take from their drivers’ fees.

Yidao will take the lead in changing the sector’s commission charge model into a differential information service charge model from Sept. 6, the Beijing-based company said on its official WeChat account today.

If the fare is less than CNY20 (USD3.09), Yidao will charge an information service fee of CNY1 (15 US cents), and so on up to a maximum of CNY5. The company aims to increase drivers’ incomes and maintain the sector’s healthy and orderly development.

Some ride-hailing firms have been arbitrarily adjusting their pricing methods, Li Huaqiang, head of the transport ministry’s transport services department, told reporters yesterday. Taking advantage of their dominant market position, the firms have set too high a commission rate, prompting drivers to work overtime or when tired, thereby infringing their rights and interests, he said.

Regulators have now ordered ride-hailing platforms to regulate autonomous pricing behavior, cap the commission rate, and strengthen communication and consultation with drivers.

China had 241 ride-hailing platforms with 3.51 million licensed drivers at the end of last month, per ministry data. Most ride-hailing platforms give about a 35 percent commission to drivers, some offer 20 percent to 25 percent, while others even give 50 percent, a survey by People’s Daily Online found.

Formed in Beijing in May 2010, Beijing Oriental Cheyun Information Technology, Yidao’s operator, was one of the world’s first ride-hailing platforms. It was reported to have delayed payments to drivers since 2019.

In response to the claims, Yidao said it has set up ‘compensation accounts’ which drivers can use in the firm and at partner shopping malls or they can later convert the funds into company stock. Yidao added that it will also allocate half of its profit every year to pay drivers or refund users who want the money in cash.

Editor: Peter Thomas