A Chinese mobile phone user uses the taxi-hailing and car-service app Didi Chuxing on his Apple iPhone smartphone in Jinan, East China's Shandong province, Feb 22, 2015. [Photo/IC]

IN RESPONSE TO complaints by passengers at the doubling or even tripling of fares as Spring Festival draws near, Didi Chuxing, China's largest ride-sharing platform, announced on Monday that it will ban its drivers from collecting the "dispatching fee", a tip paid by passengers, during the holiday period. Beijing News commented on Wednesday:

The fact that it is hard to hail a ride is not unexpected given the 25 percent decline in the number of Didi drivers as a result of the recently introduced restrictions and the 30 percent increase in ride requests, as the Beijing-based car-hailing giant explained. This highlights a dilemma facing the burgeoning internet-based sharing economy, which is struggling to strike a balance between market-oriented innovation and administrative supervision.

The rise of ride-sharing companies and home swaps offers a fresh perspective of how to make the most of idle resources, be they cars and houses. Didi's unmatched success is a case in point. It and its domestic rivals have made notable progress in bridging the gap between rising demand and insufficient supply, particularly in the mega-cities where the number of traditional taxis is restricted.

With more people becoming accustomed to booking rides online and more car owners willing to participate, the industry has great potential.

It still faces major headwinds, though. The management of ride-hailing services contradicts that of traditional taxis in terms of drivers' professional qualifications, security risks, and taxation. Providing affordable quality services to customers while trying to keep afloat has been a constant struggle for most ride-sharing companies. For local governments, it remains a tricky task to ensure market-based competition without pushing traditional taxi drivers out of the business.

The short supply of ride-sharing taxis during the travel rush during Spring Festival is just the tip of the iceberg, joint efforts will have to be made to put the sharing economy on the right track. For their part, service providers should take more managerial responsibility while offering better services and quality products, and local supervisory authorities need to embrace internet-plus innovations and refrain from maneuvering the market.