A step backwards? Chinese cities’ harsh draft rules against car-hailing apps ‘hinder innovation’
If adopted, proposals may violate law and would turn back time to ‘when getting a cab was like winning a lottery’, critics say
China’s biggest cities have unveiled strict draft rules to regulate popular car-hailing services, sparking criticism that the proposed regulations will suffocate the booming industry and stifle innovation.
Beijing and Shanghai, for instance, would require all drivers for car-hailing services to be residents with local household registration while their vehicles must be locally registered – a threshold that would disqualify many of the present pool of drivers in these cities. Chongqing and Hangzhou are set to impose similar rigid requirements.
The rules try to regulate the car-hailing business as taxis, and show a tendency to protect local cab firms
Should the rules come into effect, they will curtail service providers like Didi Chuxing, which beat Uber out of China, and turn an internet-based business model into an old-school urban taxi operation subjected to excessive licensing requirements, analysts say.
“The rules try to regulate the car-hailing business as taxis, and show a tendency to protect local cab firms,” said Wang Chenxi, a transport service analyst at Beijing-based research firm Analysys International. “This goes totally against the concept of the sharing economy.”
Wang said the rules would hurt taxi drivers, passengers and operators alike and put many drivers out of work.
Didi Chuxing, the biggest industry player with an 80 per cent market share, said the draft rules would hinder innovation.