China gives go-ahead to Uber and other ride-hailing services

China gives go-ahead to Uber and other ride-hailing services

China announced its intention to formally sign-off on ride-hailing services like Uber on Thursday, potentially fueling the battle between the American giant and a Chinese rival.

The government said it would implement the new nationwide rules in November, Bloomberg reported, though ride-hail companies have been operating in the absence of the rules already.

ADVERTISEMENT
Under the rules, ride-hail drivers would have to register with local cab authorities. They are also forbidden from driving for ride-hail services if they have a criminal history.

Other elements of the rules prioritize safety, as well: Bloomberg reported that the government will require ride-hail vehicles to include GPS and an alarm.

The rules could have been more onerous by, for example, by limiting ride-hail services to only certain classes of vehicles or putting more restrictions on the relationship between drivers and the companies.

Uber, like many American tech companies, views Chinese customers has key to its rapid global rise, and has spent heftily to fund its push into the country. The company is currently operating at a $1 billion in China.

But it’s expansion is not without resistance from Chinese firm Didi Chuxing, which has backing from several major firms like Alibaba, Tencent and Apple. Didi is also allied with Lyft, Uber’s chief American competitor, in a bid to consolidate power against the $68 billion Uber.

Both companies cheered the new rules.

“We welcome the new regulations, which send a clear message of support for ridesharing and the benefits that it offers riders, drivers, and cities,” an Uber executive told Reuters in a statement. Didi said that it would make an “earnest effort” to comply with the regulations, according to the news service.