Shanghai’s Dazhong Taxi urges authorities to closely monitor ride-hailing apps for violations

PUBLISHED : Thursday, 23 June, 2016, 10:21pm
UPDATED : Thursday, 23 June, 2016, 11:02pm

Shanghai Dazhong Taxi, one of the mainland’s largest taxi operators, has filed a letter of complaint to the Ministry of Transport, ratcheting up pressure on regulators to effectively police the ride-hailing services such as Uber.

The subsidiary of A-share firm Dazhong Transportation Group became the first major taxi firm on the mainland to openly challenge policymaking and regulation by state-level authorities amid the rising popularity of internet-based car-booking services.

“Unfairness can be widely seen in the internet-based car-booking market,” Dazhong said in the letter which was published online.

It added that ride-hailing platforms operated by Uber and Didi Kuaidi allowed plenty of unlicensed cars to offer taxi services, “a severe violation” of relevant rules governing the sector.

A Dazhong official said Thursday that the complaint by the company could be interpreted as a call from the whole taxi industry to create a fair market.

Industry sources said that the letter of complaint by Dazhong would be followed by petitions from other taxi companies to better regulate ride-hailing services.

The ministry of transport published draft rules in October pledging to increase oversight of internet-based car-booking firms. It stipulated that all car-booking companies had to be licensed and set up their servers on the mainland. The rules have yet to come into effect.

Banking on the soaring use of internet and mobile internet by mainlanders, ride-hailing service providers such as Uber and Didi Kuaidi exploded in popularity in the past few years as they not only offered passengers efficient and cheaper services, but created thousands of part-time jobs for car owners across the mainland.

Beijing-based consultancy Analysys International predicted the size of the mainland’s ride-hailing market would hit at least 52 billion yuan (HK$61.4 billion) by 2018.

However, the rapid growth of the internet-based car-booking operators had a devastating impact on taxi firms such as Dazhong.

On the mainland, most taxi companies are state-owned. They control the majority of taxi licenses, leasing them to drivers who pay management fees to the taxi companies.

Critics charge that the taxis companies have a monopoly at the expense of drivers’ health and interest.

Yang Guoping, chairman of Dazhong Transportation, said at a business conference on Monday that taxi firms could survive the cutthroat competition brought by the car-booking firms by fine-tuning their own services.

He added that a fair and regulated market had to be established to maintain social stability.