“All cars for such services need to be registered as taxis”, according to the draft, which was published on the ministry’s website and is open for public feedback.
Advertisement
China’s Transport Ministry is planning to ban the use of private cars in online taxi-hailing services, in part to protect consumers and combat new competition for traditional operators. Under the new rule, if they want to legally offer rides for payment, they must apply for a license, turning their private cars into vehicles for commercial use, whose service life is far shorter.
Uber and Didi Kuaidi are locked in a turf war in China, investing billions of dollars to lure in riders with steep discounts and to subsidize the money earned by drivers. Despite being loaded with cash and armed with plans to expand into dozens of cities, the companies continue to operate in an ill-defined area when it comes to enabling privately owned cars to provide paid transportation, a service traditionally confined to licensed taxis and rental companies.
Shanghai’s policy governing Internet-based services will still be subject to the nationwide guidance to be announced by the transport ministry.
Such companies were encouraged to upgrade their services using mobile-internet technologies, while cars used by online operators would be barred from roaming the streets to collect passengers, it said.
A few urban Chinese residents welcomed the move. The number of seats will be limited to no more than seven in each vehicle.
Beijing prosecutors have ordered the arrest of a local woman who allegedly swindled car-hailing service Didi-Kuaidi out of a few 30,000 yuan (4,727 US dollars) with fake rides, local newspaper Beijing Times reported on Saturday.
Advertisement
The draft rules, published on the website of the Ministry of Transport, said they are aimed at maintaining order by strengthening supervision of online vehicle hailing apps. But the prospect of tighter oversight in China could also be bad news for Uber, which has aggressive plans to expand in up to 100 additional cities in the country in the next year, the report notes.
