No Hukou, No drive: Chinese riding-hailing apps panic at new restrictions

China’s leading ride-hailing platforms, including Didi, Yidao and UCAR on Sunday responded to a new draft regulation with strict conditions, after Beijing and Shanghai authorities released it on Saturday.

Specifically, the authorities demanded that all ride-hailing vehicles have a local license plate, and added regulations on the vehicle’s emissions and vehicle size. Most important, all drivers must have local hukou, a form of local city residency, as well as a driving license issued by local authorities.

The fact is, most of the existing vehicles and drivers on ride-hailing platforms will be pushed out if the draft regulations are put into effect, because few existing vehicles or drivers on these platforms can meet the requirements, especially the hukou.

The good thing is, the Chinese authorities are still seeking opinions for their draft regulations. Ride-hailing platforms including Didi, Yidao and UCAR have a chance to let their voices be heard.

In its response to the draft regulations, Didi used Shanghai as an example. The company said that less than 1/5 of the existing Didi vehicles in Shanghai can meet the vehicle size requirements, and that fewer than 10,000 out of the total 410,000 Didi drivers in Shanghai have a Shanghai hukou.

When the requirements of local license plate and local driving license are considered, 98% of the current Didi vehicles in Shanghai will be eliminated, according to tech blog

Apparently, the regulations will be fatal to Didi’s Shanghai and Beijing operations, since the major revenue source of the company lies in commissions taken from its drivers. Didi stressed the possible impact of the new regulation on employment and ride-hailing costs.

“Millions of ride-hailing drivers will lose their job and income. It means that millions of families will lose their major source of income,” Didi said in their response to the draft regulations.

“Didi cordially asks the local authorities to give equal employments to residents with or without a local hukou, and give a chance to the people’s confidence and passion for entrepreneurship and innovation.”

Didi’s rival Yidao was comparatively mild in its reply, but Yidao also asked for space to develop.

“The ride hailing industry is one of the best representatives of the sharing economy. The industry needs both policy regulation and space to develop,” said Yidao in its reply.

The new regulations seem to have the least impact on another ride-hailing platform, UCAR, because all its drivers and vehicles have been provided by the company itself. Still, the company had something to say.

“The specific policies won’t impact UCAR. The local regulations, including those of Beijing and Shanghai, are stricter than the earlier ones by the Ministry of Transport. The requirements on local hukou are too harsh,” said UCAR in its reply.

According to Didi’s report in September, the number of registered drivers on its platform reached 15 million by September 22. Yidao said in June that it had over 2.3 million vehicles, and over one million drivers.

The Ministry of Transport of China legalized the ride-hailing services in late July.

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AllTechAsia Staff

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