It appears ride-hailing services that compete with taxis will soon have official approval in China.The country's transport regulator has released two first-of-their-kind draft regulations permitting such companies to operate.
The two draft regulations cover reforms in the traditional taxi industry, and online taxi reservation service management respectively.
They're released amid escalating competition between traditional taxi companies and new operators relying on Internet-based ride-hailing apps.
Xu Yahua, an inspector with the Ministry of Transport, said, "We are planning to provide differentiated management and services to the taxis cruising streets for customers and taxis serving reservation orders. The first kind can pick up customers on roads, or wait for them at taxis stops. They can also provide reservation services. The second kind can only provide reservation services. "
However, the new drafts state that online ride-booking services can only be offered by taxis registered as online ride-booking service providers.
Private cars are banned from providing such services.
Wu Dong, deputy director of regulations and legislation at the ministry, said, "The vehicles must have obtained operating qualifications, which is a clear standard. But the detailed requirements need to be decided by the local governments in accordance with their realities."
The drafts also call for the reform of the traditional taxi industry.
Xu Yahua says the industry need to form sound and fair standards on contracts and fees.
"Contract operation aims to motivate drivers and improve efficiency. So it is rational in reality. The contract fees are closely related with taxi drivers' interests and development of taxi companies. We should coordinate the drivers, companies and industry association to reach sound and fair contract fees," said Xu.
Public opinions are now being solicited on the drafts, and opinions will be collected over the next month.
The drafts come two days after ride-hailing industry leader Didi Kuaidi secured a municipal license in Shanghai for private-car booking services.
The company says it is also working with transportation regulators in other cities in China to replicate the licensing model.
Stats show that as of the end of last year, China had 1.4 million taxis nationwide and over 2.6 million people were engaged in the taxi industry.
