The announcement of the regulation legalizing online car-hailing services. Image: sina
Long awaited regulations giving legal status to online car-hailing services aiming to regulate the taxi marketin China was released by the Central Government.
The announcement of the regulation legalizing online car-hailing services dispels the regulatory uncertainties for major players such as Didi and Uber, which have invested heavily while fighting for market dominance in China.
The regulations require that car-hailing platforms should be responsible for checking whether drivers’ private cars are in good condition and are insured, and they must report the results to local transportation bureaus.
The threshold for drivers to enter the business is also regulated. Drivers with three or more years of driving experience and a clean driving record, including no record of dangerous driving, drug abuse and drunk driving, are eligible.
Both Didi and Uber welcomed the new regulation in statements on July 28, saying they believe it will usher in new growth for China’s online ride-booking industry. However, what is good news for ride-hailing apps means more pressure on the traditional taxi industry, said Zhang Xu, an analyst with Analysis International. The regulations were approved and released by the State Council on July 28. They will take effect on 1 November, 2016.