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Didi Chuxing

Ride-hailing rules in China highlight clash of concerns between central and local governments

Top cities ban migrant workers from driving services despite nationwide easing of migration controls

PUBLISHED : Saturday, 24 December, 2016, 11:48am
UPDATED : Saturday, 24 December, 2016, 12:56pm

Beijing and Shanghai have banned non-permanent residents from working as drivers for ride-hailing services, in the latest clash between China’s rigid household system and a push to make the new economy a driver of growth.

Watch: Who's Winning the Ride-Hailing Wars?

The legal basis for the move is rooted in hukou, a household registration system to control population movement that dates back 3,000 years to the Shang Dynasty, when rulers recorded their subjects’ names and residence on turtle shells and bronze vases.

The new requirement, issued by the municipal transport authorities, is likely to disqualify most drivers working for ride-hailing companies, such as Didi Chuxing, which merged with Uber China in August.

The company, which boasts a market share of 87 per cent, said only 3 per cent of its drivers in Shanghai were permanent residents of the city.

Zhang Ning, a researcher at the Chinese Academy of Social Sciences, said: “The big cities want to get something done in cutting pollution and traffic jams, and they find the Didi drivers an easy target.”

The ride-hailing rule is just the tip of an iceberg of increasingly intrusive state supervision and control of economic activities and personal lives, analysts said.

The rule is set to change the lives of millions of people.

Didi lashes out at car-hailing guideline proposals in leading cities

Zhang Li, a 25-year-old migrant worker from Jiangxi, has made his living in Shanghai as a Didi driver but has received no instructions or advice from his employer of what he should do when the rules came into effect, making his job illegal.

Lots of city mayors and party secretaries do not have the hukou of the cities they work in, so why can’t a non-local resident become just a Didi driver
Zhou Qiren, Peking University

“What else can I do?” Zhang said. “I did not voice my thoughts when the draft rules were open for public opinion because it wouldn’t change anything.”

Zhang Weiying, a professor at Peking University, harshly criticised the rules when a draft version was published three months ago.

“We really need to think about who should be able to deprive the fundamental rights of citizens,” Zhang said at a symposium debating the new ride-hailing rules. “Now it seems every single [Chinese] government department can issue a document taking away people’s rights ... they are doing so with only one purpose: to defend interest groups.”

For China’s city managers, the protection of local taxi operators’ interests and local jobs and checks on internal migration have exceeded the desire to help people like Zhang.

Although the central government is easing controls on migration on a nationwide basis, China’s top cities are trying to control their populations by restricting home purchases and banning migrant children from attending local schools.

Revealed: thousands of Shenzhen drivers for car-hailing apps Uber, Didi Chuxing have criminal records, history of drug abuse

Hukou have become more valuable because of the increasing attached privileges in employment, education and social welfare coverage.

“Lots of city mayors and party secretaries do not have the hukou of the cities they work in, so why can’t a non-local resident become just a Didi driver?” Zhou Qiren, a professor at Peking University, asked at the same symposium on the new rules.

Other analysts said the vested interests of local governments are to blame.

Li Chen, an assistant professor at the Centre for China Studies of the Chinese University of Hong Kong, said the central government wants to unleash economic potential by encouraging more migrant workers to move to cities, but local authorities have their own concerns.

“They may be lacking finances or other resources in education and medical care, and worrying that outsiders would hurt the interests of local residents,” Li said.

“More contradictions are expected in the coming years,” he added.