Didi Kuaidi, a firm valued at $16 billion and backed by Chinese Internet giants Alibaba Group Holding and Tencent Holdings, said it had received a license to offer privately-registered auto bookings in Shanghai, and was seeking permission from other cities.
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Both Uber, the infamous American taxi-hailing company and Didi Kuaidi, its Chinese rival, have said they’re applying for licences to legalise their operations in China. It also gives Didi Kuaidi a leg up on Uber as both companies await the China central government’s first regulation on mobile apps for ride-hailing services.
It will also invest up to 6.3 billion yuan (1 billion) in China in a bid to increase its presence in the country and set up in Shanghai’s Free Trade Zone.
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.
“This license is a key milestone for the official recognition and the legal status of private car-hailing services in China”, Didi Kuaidi said in the statement.
Travis Kalanick wrote in a letter to investors in June. It’s not clear if Uber’s Shanghai subsidiary is related directly to the regulatory approval process, although one of the mandates is that approved car-flagging apps are licensed and based in mainland China and follow Chinese web media and data protection laws.
Car-booking service providers will be required to pay taxes, Sun said during a speech in Shanghai.
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Shanghai’s policy governing Internet-based services will still be subject to the nationwide guidance to be announced by the transport ministry.
