Tim Culpan is a technology columnist for Bloomberg Gadfly. He previously covered technology for Bloomberg News.

Christopher Langner is a markets columnist for Bloomberg Gadfly. He previously covered corporate finance for Bloomberg News, and has written for Reuters/IFR, Forbes, the Wall Street Journal and Mergermarket.

While executives at Didi Kuaidi and Uber look like they can at last pop the champagne over China's official legalization of their businesses, there is one company left in the corner with the dunce's hat on.

UCAR, and its affiliate Car Inc. were betting on tight rules that would give their own business model a regulatory advantage. Through a series of complicated financial maneuvers that Gadfly discussed two weeks ago, Car has been raising money to expand its fleet for the primary purpose of feeding UCAR's chauffeur business.

Unlike Didi and Uber, which use freelancers, UCAR employs drivers and rents cars that are contracted out together for taxi-like services. The bet being made by Car and UCAR was that Didi and Uber would be declared unlawful, or at least severely curtailed, clearing the way for UCAR to be one of the few players that could operate openly and legally.

What a Pity
Car Inc. tripled the net amount it spent buying new cars last year to fuel the growth of parent UCAR
Source: Company filings

The cards didn't fall that way. According to Bloomberg News, China's transport ministry is about declare that online car booking services can operate legitimately, with a number of stipulations that don't seem at all onerous or restrictive.

While UCAR, which is Car's biggest shareholder, doesn't own its vehicles, it does have to cover salaries and other upfront costs. Meanwhile, Car boosted its long-term fleet fourfold in 24 months and rents out a whopping 92 percent to UCAR.

Costly Cars
Car Inc.'s finance costs rose 77 percent as it boosted its fleet to serve parent UCAR
Source: Company filings

With Didi and Uber and their freelance rosters now set to get the green light, maybe Car shareholders can be consoled by the fact that it also has a used-car sales business.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the authors of this story:
Tim Culpan in Taipei at
Christopher Langner in Singapore at