China bans private cars using Uber

China has restricted the use of Uber to drivers with a taxi licence, saying the action will protect users.
Written by Chris Duckett, Contributor

China has banned private cars from taking part in ride-hailing apps, throwing up a new hurdle to Uber's global expansion.

Only licensed taxis may use ride-hailing apps, the Ministry of Transport has announced. Such apps are hugely popular in China, but the ministry said it needs to protect users.

The ruling could be a setback for Uber, which faces legal challenges in South Korea, India, Europe, California, and other markets for using drivers who lack taxi licences. In New Delhi, Uber was forced to suspend operations after one of its drivers was accused of allegedly raping a woman.

"While we encourage innovation, we prohibit private cars from using platforms to participate in the 'hired car' business," said a ministry announcement.

Uber said that its "business is running as usual", though it has given no indication as to how many of its drivers might lack taxi licences.

China's ride-hailing market is dominated by domestic competitors Didi Dache, backed by internet giant Tencent, and Kuaidi Dache, backed by rival Alibaba Group. Those services are used mostly by taxi companies.

A third Chinese internet giant, search engine operator Baidu, jumped into the market in December by investing in Uber.

Taxi companies in the US, Europe, and other countries have complained that Uber and similar ride-hailing services have an unfair advantage because they are not covered by regulations that affect the established industry.

Last week, Uber announced that it would be offering a new service to ferry large items in Hong Kong, Uber Cargo.

Fees for the service begin at HK$20, and are charged at HK$1.60 per minute and/or HK$4.50 per kilometre.

At the end of last year, Victorian Taxi Service commissioner Graham Samuel said ride-sharing services like Uber could help give the Victorian taxi industry the kick it needs to change archaic rules and regulations.

"The use of cars, in the way Uber does it, is illegal," Samuel said at the time. "But at long last, they are coming to the party to try and make their operations legal, their drivers are now required to get accredited."

Samuel said drivers need accreditation because without it, there is no record of who they are, and no possibility of tracking them down if something goes wrong.

With AAP

Editorial standards