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The draft consultation document suggests private car-hailing app operators and their drivers will have to apply for licences from local authorities in China. Photo: Xinhua

China plans public consultation ‘in days’ on regulation of car-hailing app operators

Andrea Chen

China may launch a public consultation on regulating the country’s controversial private car hailing services, a mainland newspaper reported on Monday, underscoring the divisions that exist even among government officials.

The Economic Observer newspaper said that the consultation document covering “temporary” regulations could be issued “within the next few days”.

The draft is expected to require private car-hailing app operators and their drivers to apply for licences from local authorities, the report said.

China currently lacks regulations covering the services offered by more than two million private car-hire drivers.

These drivers have often found themselves caught up in crackdowns carried out by local authorities in major cities such as Beijing and Guangzhou because of protests by traditional taxi companies as they see car-hailing app operators continuing to claim a greater market share.

On Saturday, Xu Yahua, a senior transport services official at the transport ministry, said online car-hailing services could help to ease traffic congestion in major cities, China News Service reported.

Xu’s remarks followed criticism of car-hailing app companies by Beijing’s traffic police, who argued that there were now a lot more private car drivers on the road offering the same services as taxis because of the app-service operators, which had added to traffic jam problems.

The Economic Observer reported that in the draft regulation, the private car-hailing services would be categorised as online ride-hailing services in the new regulation.

It did not say how long the consultation period would last, but suggests that the controversial private car-hailing services would eventually become legal on the mainland.

However, not all private car drivers and ride-hailing operators are eligible to provide such business.

The app operators would be required to apply to for a licence from the municipal and provincial transportation regulators in all of regions where they plan to offer services, said The Economic Observer, quoting a source at the transportation ministry as saying.

The drivers working for the car-hailing operators would have to attend standard training and pass tests before they were granted licences as private car-hire drivers, the source told the newspaper.

The regulation would also pose hurdles for foreign companies wishing to provide such services by requiring operators to place their computer servers within mainland China and also have their services carefully scrutinised by mainland authorities on the basis of national security, said a copy of the draft regulation obtained by mainland news website, Jiemian, last month.

Didi Kuaidi, China’s largest taxi hailing service provider, is competing with the expanding US-based company, Uber, for the mainland’s booming private car-hailing market, which is now estimated to be worth 400 billion yuan, according to China International Capital Corp, the mainland’s first joint venture investment bank.
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