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在线翻译:
szdaily -> In depth -> 
Draft rule takes aim at online car-booking services
    2015-10-13  08:53    Shenzhen Daily

    CHINA’S plan to ban the use of private cars in online car-hailing services will deal a heavy blow to its online taxi industry, affecting major companies such as Didi Kuaidi and Uber, analysts said Sunday.

    China’s Ministry of Transport on Saturday released a draft regulation on car-booking services that will require online taxi-hailing operators to obtain licenses from transport authorities.

    The new regulations will address the problem that the online car-hailing model had “disrupted normal market order, which has affected the taxi industry and social stability,” authorities said.

    The regulation, which is open for public comment for a month, states that all private cars must be registered as a “taxi” before they can be used for online car-hailing. This means that the cars will have to be scrapped after about eight years of service.

    Drivers will also be required to meet certain qualifications such as driving experience, a certificate and a labor contract with an online taxi-hailing platform. In addition, they will be banned from using more than one platform at a time and cannot pick up passengers that hail them from the street.

    According to the draft, car-hailing service operators should not be in a dominant position in any place they offer services and must not hinder fair market competition.

    But the companies have been upbeat about the guidelines, saying they will bring regulatory clarity. It is unclear how strictly the rules will be enforced or what they will look like in their final form.

    Highlights of the new rules

     Private cars will not be allowed to provide online car-hailing services unless registered as taxi

     Operators will need to be licensed from transport authorities

     Operators must have at least three-year or more driving experience

     One vehicle can be registered with one online taxi-hailing platform only

     Online private-car-hailing app providers must place their servers on the Chinese mainland

     Operators are not allowed to respond to random taxi-hailing on the street

    A path for legalization

    In draft rules published Saturday, the Ministry of Transport said online private-car-hailing app providers must place their servers in China, share their data with local transport authorities, register their cars as taxis, sign labor contracts with their drivers and insure their cars and passengers.

    In addition, foreign companies must obtain a license to carry out a telecommunications business in China and be subject to national security checks, the ministry said. It didn’t mention Uber by name in the lengthy document.

    The rules present a path for legalization in China for Uber and Chinese private-car-hailing app provider Didi Kuaidi Joint Co. Both have been locked in a turf war for the past year and foresee a market of more than 700 million potential urban commuters and a growing middle class that can increasingly afford the upgrade from traditional taxis.

    A Didi Kuaidi spokesperson said the company welcomed regulations and would study the report, but she declined to comment on any specifics.

    Such businesses currently operate in China but in a gray area. So far, private taxis have been illegal in most of the country, as in many other nations. According to a report by Xinhua News Agency in July, more than 1,200 private drivers from Didi Kuaidi and 170 from Uber were caught by Beijing authorities this year on suspicion of running illegal taxi services and evading taxes.

    Didi Kuaidi and Uber have invested heavily in private-car-hailing services, which an increasing number of Chinese use via smartphone apps. Didi Kuaidi has raised US$3 billion and Uber has earmarked more than US$1 billion for the Chinese market.

    While regulators have been slow to catch up with developments in this hot market, they are gaining ground. On Thursday, the transport authority in Shanghai said it had granted Didi Kuaidi, which has an estimated value of US$16 billion and is backed by Chinese Internet giants Alibaba Group Holding Ltd. and Tencent Holdings Ltd., a license to operate an online car-booking platform in that city.

    Didi said the license was the first of its kind in China and that it is seeking more licenses for other cities. Uber is also seeking licenses for Chinese cities.

    While the rules published by the transport ministry legalize ride-hailing nationwide for the first time, Uber and Didi Kuaidi would have to change their businesses if the rules are adopted in their current form.

    For example, the proposed regulations require all drivers engaged in private taxis to have three years of driving experience, to limit the number of seats in a car to no more than seven and they would ban carpooling and ride-sharing services offered by private drivers without a taxi license.

    Uber said that to localize its Chinese business, Uber China has officially registered in Shanghai as a separate entity called Shanghai Wubo Information Technology, run by Chinese managers. It has obtained the requisite licenses and qualifications as an Internet company and placed its servers in China, the company added.

    In December, Uber tapped China’s top search engine operator Baidu Inc. as a strategic partner.

    Still, as of the end of June, Didi Kuaidi controlled more than 80 percent of the Chinese private-car-hailing market by ride volume, according to market research firm Analysys International, compared with 15 percent for Uber. But Uber has declared China as its most important overseas market and has set out a plan to expand to 100 Chinese cities in the next year from about 20 presently.

    More hassle

    Many private drivers said they were considering quitting the business because the new regulations would create more hassles for them than benefits.

    Yin Hao, a Jiangsu-based car rental agent who currently has over 800 private car owners on his books for his online taxi business, told the Global Times that the draft would greatly affect his business.

    “Once the draft is settled, many of the drivers will not want to re-register their cars for commercial purposes,” he said.

    Many experts believe that the regulation does not meet the market’s requirements, which may restrict the rapid development of the sector.

    Wang Jun, an associate professor at the China University of Political Science and Law, told news website caixin.com that the draft regulation is merely expanding types and numbers of taxis based on the original taxi management system. The biggest advantage of this service lies in mobilizing large numbers of non-commercial vehicles to realize the sharing-economy idea.

    However, managing a new sector in an old-fashioned way will limit the development of the field.

    Wang’s opinion was echoed by Gu Dasong, an associate professor of transport laws at Southeast University, who told the Global Times that the draft seems to turn Internet companies into secondary taxi firms. He said that private cars should be better utilized to meet the demand for public transportation and local governments should decide transport regulations based on their unique situations.

    (SD-Agencies)

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