The Chinese Ministry of Transportation on Saturday released a new set of draft regulations to curb the car-hailing business. The new regulations will mostly affect market leaders Didi Kuaidi and Uber by requesting private car owners undergo formal licensing. It has also sparked great controversy among providers and customers.
Lu Zhengyao, CEO of CAR.Inc ( original China Auto Rental Inc ) a minor competitor to Didi and Uber, supports the regulations. CAR Inc. owns their vehicles and it will likely be easier for them as a group to apply for operating licenses from the authorities in comparison to private car owners.
According to a June report by CNIT-Research, UCAR accounted for 0.8% of the ride-hailing business in China, while Didi Kuaidi accounted for 80.2% and Uber and Yidao Yongche’s accounted for close to 20%.
“These regulations will bring fair and just competition to companies in the industry and boost the development of the industry in a sound way,” Lu said in an interview with Tencent Tech.
CAR.Inc earlier launched a series of ads in the Chinese market with the slogan “Beat U”, an attempt at encouraging users to boycott Uber in favour of CAR.Inc’s own service.
However, public opinion seems to have turned in the opposite direction with many in the community criticizing authorities for intervening with robust market processes by placing more restrictions.
AllChinaTech has translated the following comments from select opinion leaders on Sina Weibo, regarding their attitude toward the new regulations.
@ Wang Fuzhong (an economist). These regulations are typical of people with vested interests, hindering reform and innovation. Didi Kuaidi and Uber solved the problem for many people unable to take taxis during rush hour. They assumed responsibility for the Ministry of Transportation. Why should the ministry want to mess with this? Is this only to save face for the Minister of Transportation?
@ Ren Zhiqiang (China’s Donald Trump). Officials who don’t understand the purpose of “Internet Plus” will hinder the strategy from being put into practice. This silly set of rules will niether benifit the Chinese people nor aid in implimenting the “Internet Plus” strategy. It’s basically using conservative thoughts to firmly cage innovation. “Internet Plus” at its core, is about beaking rules and regulations and ridding society of out-of dated traditions.
@ Wuyue Sanren (famous Chinese columnist and critic). After reading the new regulations published by the Ministry of Transport, I suggest the Ministry change its name to the Ministry of Traffic Jams. The [Sharing economy] used to be a way to serve the public by leveraging public resources but now it has become another way to manage taxis. I returned to China months ago. My strongest feeling is that Internet apps in China, even those copycats of foreign applications, are much more convenient than their foreign counterparts. However, the government still tries to manage them in such a lame way, its almost akin to eunuchs attempting to teach regular people how to have sex.
Mochou Li is a guest writer at AllChinaTech.
(Edited by Rohan Malhotra)
Featured Photo from taopic.com.