China is reportedly launching a state-owned ride-hailing app.
The launch of Strong Nation Transport signals that China aims to be involved in the tech industry even as it eases an earlier crackdown on giants in the sector, the Financial Times reported Wednesday (Jan. 18).
The new Strong Nation Transport app will initially be available to Communist Party members, will cater to employees of the government and state-owned enterprises and will give users access to the cars available to other ride-hailing apps that operate in the country, according to the report.
“Because of the previous problems of disorderly expansion and data security in the ride-hailing industry, Strong Nation Transport is built on the principles of convenience and security,” the state-owned Beijing Daily said, according to the report.
The new state-owned entity will challenge Didi, the current market leader, just days after that firm was given permission to start signing up new users again after it had been stopped by an investigation into its practices around data.
Didi was hit with fines exceeding $1 billion following a probe by Chinese regulators that lasted over a year and focused on cybersecurity practices due to data security breaches.
A week before that, Didi’s payments division was hit with about $633,000 in fines by the People’s Bank of China. Penalties were levied for 12 violations concerning requirements for transactions regarding traceability and authenticity, opening accounts for financial firms and neglecting to promptly communicate important risk events.
Another recent example of regulators in China focusing on Big Tech firms there involved Ant Group.
The firm said on Jan. 7 that founder Jack Ma will no longer hold majority voting rights in the company.
The move further separates the company from its affiliate Alibaba after it had been targeted by regulators.
China began easing its regulatory spree to boost the country’s economic outlook. It had previously been adopting a number of regulations to limit the power of Big Tech firms.
Over time, the new ride-hailing app is to be made available through other apps and expand its coverage to bookings for freight, road, railway, water transport and air-shipping services, according to Wednesday’s FT report.
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