For stabilizing the thriving taxi app sector, China has ordered to impose ban on private cars from the app platforms. The Ministry of Transport in China has issued this order, which means yet another setback for Uber, which is already facing legal challenges in India, South Korea, California, Europe and many other markets due to improper taxi licenses.
The Ministry of Transport has announced that only licensed taxis will be able to use ride-hailing apps because they need to ensure proper protection of the users. According to a spokesperson of the Ministry, innovation will be encouraged in China, but private cars would be prohibited to enter in the business of hiring cabs.
The ruling is definitely a setback for Uber that was planning global expansion. However, the entire world witnessed how allowing a driver without proper background check by Uber caused a grave crime like rape of a woman in New Delhi. Following that incident, the Indian government suspended Uber’s operation right away.
Uber is claiming that they are running business as usual, but have not cleared the air on how many of its drivers are having taxi licenses.
Many domestic companies are dominating the cab hiring industry in China. For example, Kuaidi dache and Didi Dache are mostly providing the service. In December, an internet giant in China Baidu invested in Uber and joined the bandwagon of ride-hailing market in China.
Many taxi companies from different nations including Europe and the US have complained against ride-hailing services like Uber. The complaint says that such services are not covered by regulations that the established industry follows and thus it is an unfair advantage.
According to the Victorian Taxi Service commissioner Graham Samuel, Uber and similar ride-hailing services are creating a scenario where changing archaic rules and regulations are becoming essential. The way they are using cars is illegal, but they are looking for ways to make their operations legal. Thus, it is very important that the drivers they are using must get accredited. Without proper accreditation of the drivers, it is not possible to keep proper records about who they are and thus there is always a chance of happening something very wrong.