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Uber

Uber, Didi Kuaidi wince as China’s Shenzhen criminalises private-car services offered by ride-hailing apps

PUBLISHED : Wednesday, 02 September, 2015, 7:30am
UPDATED : Friday, 04 September, 2015, 12:44pm

Authorities in Shenzhen have declared car-hailing apps’ services that connect drivers of private cars with customers to be illegal in the Chinese city, which sits across from Hong Kong, the Southern Metropolitan Daily reported on Tuesday.

The municipal transport committee recently summoned executives from Uber, Chinese market leader Didi Kuaidi and China’s Yongche, the three biggest car-hailing apps in the country, to discuss regulatory matters, the report said. 

The committee said on Monday that private drivers working for the apps are engaged in illegal transport activities and reaping illicit profits, it added.

None of the three companies were available for comment on Tuesday.

READ MORE: China's car-hailing apps may be in the government's crosshairs, but investors can't get enough of them

Licensed taxi drivers in the area have complained that the apps have fundamentally changed the market and dropped their daily income to 123 yuan (US$19.32) on average, the committee said.

The three car-hailing apps were earlier warned to "restructure" their services to fit local regulations within a certain time period. If they fail to comply, penalties will be imposed, the report said. 

Along with China’s Ucar app, they were given similar orders by a handful of government ministries last month, state media reported.

According to Chinese regulations, drivers of private cars who offer taxi services can be fined 5,000 yuan to 20,000 yuan. Their vehicle can also be impounded.

Another sub-bureau in Shenzhen, a migrant city oft-touted as one of the world's workshops, required the three operators to file drivers’ information with police. 

This was at least partly motivated by the desire to increase safety in the wake of reports of women passengers being sexually molested in parts of China, India and other countries in recent months by drivers using Uber and other services.

The use of private vehicles for car-hailing, app-based services has triggered a backlash from taxi drivers across China and in Hong Kong this year, as well as in other countries like France.

Furious Chinese cabbies have organised go-slow campaigns and attacked cars and drivers of the rival service which they blame for eating into their business.

China has responded by cracking down on the apps, with police raiding Uber’s offices in Sichuan’s Chengdu and Guangzhou in May, and the Chinese capital declaring Didi Kuaidi's Didi Kuaiche and Didi Zhuanche services illegal in June.

Uber also found itself the target of a police sting in Hong Kong in August that saw at least seven drivers arrested and three office staff detained.