The nascent car-sharing sector has taken a big hit these days because China’s Ministry of Transport has decided to ban any private cars from sharing rides if they are unlicensed taxi operators and using mobile-phone apps.
The Ministry of Transport’s ban is now active even as the department agreed that such software has a “positive role” if used by licensed vehicles and chauffeurs. According to report on the ministry’s website posted by its official newspaper, these car-sharing services and applications should be differentiated from public transportation and taxis. “Banning private cars from using the apps will put passengers at ease,” the ministry wrote. On the other hand, it continued saying that apps for premium car services have an innovative service model and play a positive role” for the luxury transportation sector. Without pointing the finger on any car-hailing service provider, the nationwide policy now disclosed is in the line of other local bans on private-car use of the ride-sharing apps.
For example, according to China National Radio, the city of Beijing is now on the lookout for unlicensed cars that provide such services, fining those working for Uber, Tencent Holdings’s Didi Taxi, Alibaba Group’s Kuaidi One and Yongche.com, citing Bian Jingjun, deputy head of the transportation and law enforcement team at the city’s airport. Shanghai, Nanjing and Shenyang also recently declared any unlicensed vehicles and drivers outside the law. Uber for example only started operating in Beijing last July, as part of its global expansion, entering into the competition with domestic service providers such as Didi Taxi and Kuaidi.