The Shanghai city government has followed Beijing’s lead and moved to restrict the usage of increasingly popular taxi-booking apps, putting at risk the investments of foreign and Chinese companies into the technology.
The new regulations, published on the website of the Shanghai Municipal Transport and Port Authority, bans the use of taxi-booking apps by cab drivers during rush hours. For private vehicles licensed for hire, the authority bans the apps’ use entirely.
Between 7.30am and 9.30am, and 4.30pm to 6.30pm, taxi drivers cannot accept bookings through such apps, the regulations read.
Taxi-booking apps allow customers and drivers to co-operate to break through government price controls on fares and negotiate a market price for transportation.
The apps usually allow users to bid for cabs by adding an additional flat fare, but they do so at the expense of cab companies that provide dispatch services to the drivers.
It has also resulted in complaints from many large cities that passengers are having increasing difficulty hailing taxis on the street because many drivers refuse to pick up customers who pay normal fares.
Instead, taxi drivers cruise the streets with one eye on a collection of cell phones mounted on their dashboards, whose screens display a variety of apps that can help them find attractive fare bids. This has also stoked increasing road safety concerns on the part of passengers and regulators.