China Bans Private Cars From Offering Taxi Services Via Apps

Taxi Services
A taxi and other vehicles wait in traffic outside the China National Convention Center in Beijing, China. Beijing city will crack down on unlicensed vehicles using services including that of Uber Technologies Inc., China National Radio said on Jan. 7. Photographer: Tomohiro Ohsumi/Bloomberg

China’s Ministry of Transport banned private cars from offering unlicensed taxi services via mobile-phone apps, even as it endorsed the software as having a “positive role” for licensed vehicles and chauffeurs.

Car-hailing apps should differentiate their services from public transportation and taxis, according to a Jan. 8 report on the ministry’s website written by its official newspaper. It didn’t identify any of the service providers.

“Banning private cars from using the apps will put passengers at ease,” the ministry said. “But apps for premium car services have an innovative service model and play a positive role in meeting the high-end and differentiated transportation market,” it said.

The announcement of a nationwide policy follows municipal bans on private-car use of the hailing apps. Beijing city will crack down on unlicensed vehicles using services including that of Uber Technologies Inc., China National Radio said on Jan. 7.

The Chinese capital has fined unauthorized vehicles for offering services via apps including Uber, Tencent Holdings Ltd.’s Didi Taxi, Alibaba Group Holding Ltd.’s Kuaidi One and Yongche.com, CNR said, citing Bian Jingjun, deputy head of the transportation and law enforcement team at the city’s airport.

Shanghai, Nanjing and Shenyang previously declared unlicensed vehicles and drivers illegitimate. The eastern port city of Qingdao said Jan. 7 it will crack down on illegal taxi services by unauthorized private cars, according to CNR.

Uber Ban

“The Chinese Uber ban is the product of the same kind of protest from traditional taxi companies that we have seen in the U.S.,” said Wallace Hopp, a professor of business and technology at the University of Michigan’s Ross School of Business. “The difference is that the centralized control in China makes it possible for them to execute a ban more quickly and forcefully than is possible here.”

Evelyn Tay, a spokeswoman for Uber in Asia, didn’t immediately reply to an e-mail seeking comment on the ban.

Uber began service in Beijing in July, competing against local Didi Taxi and Kuaidi, apps that send hailing requests to nearby cabs based on real-time locations. Kuaidi, which had focused on taxi booking, in July introduced Kuaidi One, which offers high-end car bookings in cities including Beijing and Shanghai.

Law enforcement officials in the southwestern city of Chongqing in December raided a site used by Uber to train new drivers, China News Service reported last month.

Thousands of taxi drivers in the northern city of Shenzhen went on strike on Jan. 4 to protest against unlicensed vehicles using car-hailing apps, the Global Times reported this week.

Taxi drivers went on strike in the eastern city of Nanjing on Jan. 8, Xinhua News Agency said, without giving a reason for the protest.

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