Danger of monopoly forming with ride-hailing giants' merger

Beijing-based Didi, the dominant ride-hailing service provider in China, said in a statement on Monday that it will buy Uber's China operation. [Photo/IC]

Didi Chuxing has agreed to acquire the Chinese operations of its rival Uber China, putting an end to the costly battle in the Chinese ride-hailing market. Beijing News commented on Tuesday:

Normally, the merger of the two leading providers of a service would create a monopoly. The one between Ganji.com and 58.com, two major Chinese classifieds websites, last year, has been met with complaints about their more expensive yet poorer services.

It is thus only natural for customers to question whether a notable fare hike and inferior services will result from the merger of Didi and Uber China.

Such concerns are not unfounded. In all likelihood, the new monopoly will marginalize the role of customers as the traditional taxi monopoly used to do.

China now faces a daunting task of regulating the domestic ride-hailing industry it just legalized, especially at a time when a monopoly is about to take shape after the buying of Uber China by Didi Chuxing.

The relevant authorities should not only launch an anti-monopoly investigation into the merger of the two ride-hailing juggernauts, but also keep a close eye on whether they abuse their dominant role in the market at the cost of customers' interests.