China to put Uber and rivals under multi-regulatory scrutiny

Mainland authorities plan to increase oversight of internet-based car-booking firms such as Uber and Didi Kuaidi, amid their rising threat to traditional taxi operators, according to draft rules announced yesterday.

The Ministry of Transport said online car-booking companies must be licensed, have their prices guided by the government or decided by market competition, and set up their servers on the mainland. In addition, foreign-invested operators must pass national security rules. They also need to get telecommunications licences if they offer value-added telecommunications business.

Authorities are still soliciting public opinion on the drafts, which came shortly after Shanghai gave the country's first internet car-booking licence to Didi Kuaidi, backed by internet giants Tencent and Alibaba, earlier this month.

Governing regulators will be at least nine, including the central bank and the police.

The likes of Uber and Didi Kuaidi must set up branches with fixed offices wherever they operate on the mainland, and need to submit to authorities information about their drivers, including their identification, contact numbers and conversations with clients when requested.

"Internet-based car-booking operators should not be in a dominant position in any place they offer services, and must not hinder fair market competition," the draft released on the Ministry of Transport's website said, adding that any violation can be fined up to 1 million yuan (HK$1.22 million) or have their licences scrapped.