China has banned drivers of private cars from offering services through ride-hailing apps, according to the Guardian and other reports.
Only licensed taxis may use ride-hailing apps, the ministry of transport announced on Friday. Such apps are hugely popular in China, and the ministry said it needed to protect passengers as well as, it seems, licensed taxi drivers.
“While we encourage innovation, we prohibit private cars from using platforms to participate in the ’hired car’ business,” said a ministry announcement. It said companies that operate ride-hailing apps will be required to make sure no unlicensed drivers use them.
The ruling could be a setback for Uber, the Guardian says, noting that the company faces bans of other challenges in South Korea, India, Europe, California and other markets for using drivers who lack taxi licenses.
Fast Company reports that Uber's operations are facing suspension in cities around the world, including in France, India and Spain, as well as New York City-- to name just a few. The company is marshaling a small army of policy staffers to do battle with local authorities, Fast Company says.
Uber, however, has a pattern of coming into markets without licenses, establishing a demand for its services, and then, if necessary, extracting concessions from regulators allowing it to operate lawfully, but close to its own terms.
China, the Guardia says, already has ride hailing apps like Didi Dache, backed by internet giant Tencent, and Kuaidi Dache, backed by rival Alibaba Group. Those services are used mostly by taxi companies.
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