Mr. ShangkongAfter government ban, now Guangzhou wants to copy Uber

"Ru yue" contradicts Beijing's promise to be more open and fair to foreign business in China

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Guangzhou and Chengdu government officials raided mainland offices of Uber, alleging that it was operating without proper legal status. Photo: Reuters

Published: 8:45pm, 10 May 2015Updated: 10:16am, 17 Aug 2015

One of the biggest risks of doing business in China for foreign companies is regulatory uncertainty, and that risk factor is growing bigger these days due partly to fast development of global technology and innovation.

Remember the recent South China Morning Post story about global taxi-hailing app Uber in China? Two local governments - Guangzhou first and then Chengdu - raided mainland-based offices of Uber within just one week for more or less the same reason: the local authorities suspected Uber did not have "legal status" to provide taxi services in those cities.

A few days after the Guangzhou raid, something really weird happened. According to Nanfang Daily, the mouthpiece of the local Communist Party in Guangdong province, the city government of Guangzhou would soon launch a new government-owned online platform for taxi booking, similar to the business concept of San Francisco-headquartered Uber. The new taxi booking system, called "Ru yue", literally "appointment on time", will be led by the local transport authority of Guangzhou - the very same government agency that sent its officials to raid the Guangzhou office of Uber.

The major difference between Uber and Ru yue, according to Nanfang Daily, quoting officials of the Guangzhou transport authority, is that all the vehicles joining the new government-led "Ru yue" system will go through a local government approval process so they will get special licences and then provide "legal transport service" to customers who book via "Ru yue".

I see at least two major problems in the Guangzhou government's thinking on Uber and how the local government wants to extract benefits for itself. First, it's all about approval and licensing, towards which the central government may have quite different thinking these days.

Premier Li Keqiang recently ordered all levels of government departments to cut red tape and let the market play a bigger role in mainland economic development. The Guangzhou government, meanwhile, is adding more layers of approvals.

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}"Ru yue" contradicts Beijing's promise to be more open and fair to foreign business in China

"Ru yue" contradicts Beijing's promise to be more open and fair to foreign business in China