China to issue new regulations for online car-hailing apps: minister

Chinese Minister of Transport Yang Chuantang attends a press conference on reform and development of taxi on the sidelines of the fourth session of the 12th National People's Congress in Beijing, capital of China, March 14, 2016. Photo: Xinhua

China will issue new regulations for its rising online car-hailing industry in an effort to create a healthy development environment for the whole taxi industry, according to the country’s minister of transport on Monday.

Online car-hailing and traditional cruise taxis have a big difference in terms of business mode, and the current regulations are much more applicable to the traditional cruise taxis, which can harm the healthy and sustainable development of the online car-hailing industry, said Minister Yang Chuantang at a press conference during the ongoing annual session of National People’s Congress (NPC) in Beijing.

China started the reform of its taxi industry in 2015 with the establishment of a reform work group in January that year. The reform came after a rapid growth of online car-hailing businesses throughout the country which, while contributing to the GDP growth, also triggered a series of social problems at the same time.

“The taxi industry in our country now is in a special historic period when new and old problems coexist, and the old system is hindering the development of the new business mode,” said Yang, adding that the challenges facing the reform are unprecedented.

The first challenge, Yang said, is how to give consideration to the interests of all parties involved in the taxi-service chain, which concerns the taxi companies, car-hailing apps, drivers, as well as the customers.

“The demands of the interest groups are complicated and diversified. So the government and other agencies need to create a balance among all of them,” Yang told reporters during the press conference.

Meanwhile, he also criticized the unfair competition for the traditional taxi business brought by subsidies that some car-hailing apps offer to their users. Giving subsidies is a “short-term move” and will do no good to the healthy and sustainable development of the market, noted Yang.

“After all, it is a profit-driven process, and the companies will not keep doing it forever,” he said.

Yang’s remarks were echoed by Liu Xiaoming, director-general of the Transport Service Department of China's Ministry of Transport, who said that the traditional taxi business and car-hailing business should compete with each other in a fair market environment.

Despite differences, online car-hailing business and traditional cruise taxis also share some common features, such as serving the customers, which means the new regulation will concern both traditional taxi business and new car-hailing apps, Yang said.

In addition, the reform also targets the unauthorized private cars which are providing service to customers but are not allowed to do so under the current laws and regulations, according to Yang.

According to a draft regulation for the reform, the ministry has proposed ways through which such unauthorized cars can be legalized to provide transport service to the public, Yang revealed, without elaborating.

Yang also told reporters that another key issue for the taxi reform is the supply-side reform of the public transportation which can help ease the difficulty of calling a taxi at certain times, and provide more transportation choices for the public.

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