Draft rule takes aim at online car-booking services
A draft regulation has been drawn up to ban the use of private cars in online car-booking services, striking a potential blow to market leader Didi Kuaidi and United Statesbased Uber Technologies Inc.
Under the draft rule, published by the Ministry of Transport on Saturday, drivers of unlicensed vehicles are barred from offering rides for payment through car-hailing platforms.
“All cars for such services need to be registered as taxis,” according to the draft, which was published on the ministry’s website and is open for public feedback.
Zhang Xu, an analyst at Internet consultancy Analysys International in Beijing, said the proposed rule is not good news for online car-hailing service providers.
“Most vehicles on Didi Kuaidi and Uber are privately owned. Under the new rule, if they want to legally offer rides for payment, they must apply for a license, turning their private cars into vehicles for commercial use, whose service life is far shorter.
“This will discourage owners of private cars from offering rides, add to operating costs and leave car-hailing platforms short of drivers,” Zhang said.
He added that the draft guideline also requires drivers to have at least three years’ driving experience and to pass qualification tests, which are expected to further reduce the pool of eligible drivers.
Wang Limei, secretary-general of the China Road Transportation Association, told the financial news website china.caixin.com that the high threshold for private cars to enter the market is designed to increase passenger safety.
According to the draft regulation, operators must obtain licenses from the authorities and have China-based servers.
To ensure fair competition, the transportation ministry has also proposed a price-war ban.
Both Didi Kuaidi and Uber said they are closely following the draft and will continue to communicate with the authorities on it.
Liu Chang, a 25-year-old engineer in Beijing who regularly uses online car-hailing services, said, “The draft guideline is unreasonable.
“It is regulating a new business model in the same way it regulates the taxi sector. If it is passed, I will be unable to enjoy a good service at low cost.”
All cars for such services need to be registered as taxis.” Part of the draft rule on online car-booking services
CHINA’S MINISTRY OF TRANSPORT on Saturday disclosed its draft regulations on car-hailing services. According to the draft rules, the companies, such as Didi Kuaidi and Uber, will hold the major responsibility for any disputes or accidents during operation. Vehicles for non-commercial use will be banned from offering such services. Comments:
In fact, by regulating the standard of vehicles hailed online and their drivers, the draft regulations are primarily concerned with passengers’ safety. Basically, the draft recognizes the positive role of Internet-based car-booking to provide high-end services, and is poised to make it a legal business. But the service providers’ responsibilities have to be made clear in terms of disputes and accidents.
Wang Limei, secretary-general of the China Road Transport Association, Caixin.com, Oct 10
Given the embedded conservative managerial mentality, the Ministry of Transport’s new draft is likely to cause a regression in the emerging “Internet Plus” initiative, instead of regulating the online taxi-hailing services. Up to a point, it aims to place the nontraditional taxis under traditional management, and force their operators to apply for local administrative licensing, when no relevant laws and administrative regulations are available. Zhu Wei, an associate professor in communications law at the China University of Political Science and Law,
Hexun.com Oct 10
Taking the third-party information platforms, which do not directly provide the taxi-booking services as traditional operators, the Ministry of Transport’s newly released draft not only ignores some basic facts, it also goes against the prevailing division of labor in the industry. The draft is hardly in line with the demand for streamlined and decentralized administration should it require all car-hailing service providers to apply for local licensing in every city in which they operate.
Fu Weigang, a researcher with the Shanghai Institute of Finance and Law, Sina.com, Oct 10
The new draft regulations on car-hailing services deserve no praise, because they fail to meet the increasing demand for a shared economy, which can significantly reduce social costs by breaking the boundaries between private and public resources. The transportation authorities should innovate their management to cooperate with the car-hailing service providers.
Wang Junxiu, a researcher at the China Information Economics Society, Caixin.com, Oct 10