Meituan plunges 15%, worst on record, after China issues food platform curbs

Meituan plummeted 15%, its worst on record, after China issued regulations to tighten oversight of the country’s massive food delivery sector.

The government posted a notice Monday asking meal delivery operators to respect the rights of delivery staff. Online food platforms must ensure that delivery workers earn at least the local minimum income, according to a guideline released by seven government agencies including the State Administration for Market Regulation.

Tencent Holdings Ltd.-backed Meituan, the industry’s largest operator alongside Alibaba Group Holding Ltd., is already grappling with an investigation into alleged monopolistic behavior.

The regulations, which echo previous warnings to the industry, comes days after China unveiled a broad set of reforms for private and online education companies, seeking to decrease workloads for students and overhaul a sector it says has been “hijacked by capital.” The sweeping crackdown on one of the country’s fastest-growing and best-funded sectors sent a chill through tech investors, who sold off Chinese internet stocks in Hong Kong Monday. Meituan’s stock has now tumbled almost 50% from its peak in February.