Uber appears to be taking the new rules in its stride, despite the fact that their business model operates on giving out ridiculously cheap rides in order to lure passengers. The new norms will go into effect in November.
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Despite their enormous popularity, ride-sharing services like Uber and Didi Chunxing are actually illegal in China. The Transportation Ministry in conjunction with six other government ministries issued the rules. Zhen Liu, the senior vice president of corporate development for Uber’s China branch, said that the company would work with local authorities to implement the new regulations. Didi is also said to be investing $1 billion in Uber based on a $68 billion overall valuation.
Meanwhile, Didi will be making an investment of $1 billion in Uber at a valuation of $68 billion.
Another concern is that the income of the drivers has reportedly been cut by almost half after Didi Chuxing and Uber reduced aids.
These rules have not yet been adopted by regional and local officials in China, with Bloomberg noting that certain conditions might have changed. “We believe the rules will usher in a new stage of growth for China’s online ride-booking ecosystem and that Didi is prepared to meet these new requirements”.
Uber has for years been the ultimate global disruptor, besting competing taxi services around the world. Furthermore, cars can not have more than seven seats and must be equipped with safety features like security alarms and Global Positioning System. Also, vehicles that have more than 600,000 kilometers on the odometer would no longer be allowed to be used to offer ride-hailing services.
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The status of part-time drivers apparently is a question mark under the new regulations.
