Industry regulators have ordered ride-hailing companies to stop illegal operations, such as hiring drivers and vehicles without licenses, to uphold fair market competition.

A notice issued by the Ministry of Transport on Sept 2 said it and four other departments, including the Cyberspace Administration of China and the Ministry of Industry and Information Technology, summoned 11 ride-hailing companies — including Didi Chuxing and Meituan's ride-hailing unit — on Sept 1 to discuss recent illegal operations in the sector.

Some companies have engaged in malicious competition by recruiting unlicensed drivers to bring cars to join the business, which disrupted fair market competition, caused market instability and hurt the legitimate rights of drivers and passengers, the departments told the companies.

They were told to carry out self-inspection and rectify any illegal operations they discover.

The departments asked the companies to maintain a fair market and create a positive environment to boost the development of the ride-hailing industry.

Online ride-hailing companies are required to hire drivers and use vehicles with licenses to operate the business. Platforms are forbidden from hiring new drivers who are unable to provide legal licenses for driving hailed cars.

The companies were told to strengthen inspections to uncover drivers and vehicles without licenses and stop their operations immediately. Eligible drivers and the owners of vehicles should apply for licenses to carry out legitimate services as soon as possible.

The notice also urged companies to improve service quality and operational safety to win more customers.

It said companies must protect the legal rights of drivers and passengers, including regulating how orders are distributed and reducing the commission on each order, to ensure reasonable working hours and salaries for drivers.

It also said that platforms must strictly implement legal and regulatory requirements related to user information and data security.

Providing users' personal information to third parties without users' consent is forbidden, and companies must establish a data security system to cover the collection, transfer and storage of users' information.

China has more than 3.51 million licensed ride-hailing drivers serving 236 platforms.