China’s Cabinet has told local governments to promote its booming ride-hailing industry, helping to confirm the legal status of Uber Technologies Ltd. and local competitors following run-ins with regulators. It says details for each city will be decided by local governments but tells them to “encourage, support and guide” the industry.
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Unlike traditional taxis, ridesharing cars are not subject to an eight-year service limit but can operate until they have accumulated 600,000 kilometres (372,822 miles) apparently addressing concerns of part-time drivers. Taxi drivers in several cities also have protested over competition from such services. The rules require drivers have a minimum of three years’ experience behind the wheel and pass a crime check. While globally Uber leads the sector, Didi claims 87 percent of the Chinese market for private ride-hailing.
“Modern regulations can let these services grow while ensuring public safety and protecting consumers”, the company added in a blog post.
“The rules legalized online car-booking services at the national level for the first time, marking a milestone in China’s endeavor toward steady and healthy development of the rideshare industry”, Didi Chuxing said in a statement. China has been soliciting feedback on draft regulations issued in October.
The document issued Thursday said authorities would consider different types of labor agreements with drivers, while the earlier proposal would have required companies to sign contracts with them as fully-fledged employees.
Uber called the announcement of the regulations “a welcome step in a country that has consistently shown itself to be forward-thinking when it comes to innovation”. Didi raised $7.3 billion in its latest round of funding in June and Uber received almost $2 billion from Chinese backers in January.
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Drivers from both services and others like Yidao Yongche, majority owned by big-spending LeEco, have operated in fuzzy areas, with police arresting drivers and impounding cars on a seemingly inconsistent basis in China. In December, their alliance added India’s Ola and Southeast Asia’s GrabTaxi.
