China begins crackdown on unlicensed taxi apps

9 Jan 2015

App-based transportation network Uber suffered a flood of bans, restrictions and legal challenges in a number of worldwide countries at the tail end of last year and it appears China is now following suit.

As revealed by China’s State-run media outlet Xinhua, the country’s Ministry of Transport has banned unlicensed vehicles from taking passengers for cash using taxi-hailing apps.

The report points to the December detainment of 12 drivers in Shanghai using taxi-hailing app Didi Dache, which is one of two dominant taxi app firms in China alongside Kuaidi Dache. Each offender was fined 10,000 yuan (€1,361).

The crackdown is said to have been executed in the interest of public safety. Oddly, however, the report claimed the ministry will recognise the luxury car pick-up services, which it described as an “innovative model and blurring the boundary between taxis and car-rental business”.

“The ministry encourages innovation and just wants to make the business develop in an orderly manner and in accordance with the law,” read the report. “It will continue to investigate and survey the new business.”

Uber’s response

In a statement released to TechCrunch, Uber said it had not been banned in China, but would be adopting to the country’s regulations.

“China’s top leaders’ recent statements have shown support for reforms and innovation. We are also pleased to see Ministry of Transportation confirming the value and benefits that innovative mobile internet technologies bring to the transportation industry,” wrote the company.

“Uber respects the key role the government plays in ensuring that its citizens have access to safe, affordable and efficient transportation options. We are actively working with authorities around the world to adopt appropriate regulations to accommodate new technologies that can help solve many of the current problems with urban transportation – congestion, pollution and lost productivity at work. We appreciate our ongoing conversations with Chinese authorities and believe that consumers and communities will continue to benefit from the progress we have seen.”

The alleged rape of a woman in Delhi by an Uber driver in December was the latest in a long line of high-profile stories on the US$40bn-valued company. Spain, Thailand and The Netherlands are among the countries to have banned the service.

Chinese taxi image via Shutterstock

Dean Van Nguyen was a contributor to Silicon Republic