Beijing, July 29 (IANS) China has become the first major country to legalise online car-booking services nationwide slated to be enforced from November.
Major industry players hailed the new regulation as a milestone in the development of the industry in China, the Global Times reported on Friday.
Online car-hailing platform Didi Chuxing said in an open letter on Thursday that it welcomes the new regulations and the government’s endorsement of and support for the industry.
Didi Chuxing, which claims 87 per cent of the Chinese market for private ride-hailing, offers services in more than 400 Chinese cities.
US-based Uber, which competes with Didi Chuxing, said it was confident to get operator’s license at the earliest possible time, and it meets with requirements such as China-based servers. Uber currently offers services in more than 60 cities.
The new regulation requires private car owners to apply for a license, register their cars under the ride-booking service category, which allows vehicles to run until they reach an aggregate mileage of 600,000 km. Most vehicles on Didi Chuxing and Uber are privately owned.
“The regulation legalises ride-sharing service providers, and this will add pressure to traditional taxi companies. Several taxi companies have already started reforms to become more market-oriented, and tapped the Internet. Those who are slow to adapt may find it difficult to survive,” Zhang Xu, an industry analyst told the Global Times.
The new regulation allows local authorities to decide how many cars a city should have, and the fares should be based on market forces.
They can also set fares when they deem necessary. It has banned operations with lower-than-cost fares “that disrupt the market order,” Zhang added.