China Bans Private Drivers in Taxi App Clampdown
JANUARY 09, 2015
Shanghai. China’s transport ministry has banned taxi hailing apps such as Uber Technologies and local rivals Kuaidi Dache and Didi Dache from using cars and drivers without taxi licences in a bid to regulate the rapidly growing sector.
The nationwide ban comes after authorities in the Chinese city of Chongqing began investigating Uber in December over concerns that its drivers were not properly licensed.
“Every limousine app company should abide by transport market rules, take their responsibilities seriously, and ban private cars from operating on their platform,” the Ministry of Transport said in a statement late on Thursday. “This will allow passengers who use these services to travel at ease.”
The statement did not name any taxi hailing apps.
Uber, backed by Chinese internet giant Baidu, has also come under fire in other countries over licensing issues. The company, through its apps, charges a fee to play matchmaker between passengers and drivers, some of whom are registered taxi drivers.
The US company is a comparative latecomer in China, where taxi app users are set to triple to 45 million by 2015 compared with 2013, according to Chinese research firm iResearch.
Local apps Kuaidi, backed by Alibaba Group Holding, and Didi, in which Tencent Holdings has a stake, hold between them around 90 percent of China’s taxi app market.
Uber, Kuaidi and Didi were not immediately available for comment.