The Shanghai Transportation Committee has for the first time granted a license for operating an online chauffeur service platform, and Didi-Kuaidi was the first to receive the license on October 8.
China's ubiquitous chauffeur operations are set to go legit
“Shanghai, as the most economically developed city in China, may have set an example with the move, leading other cities to follow suit,”said Yuanpu Huang, founder of O2O new media site Iyiou.com and an industry analyst.
He predicts that all of China’s chauffeur operations will be licensed by the first half of next year. “The State has always encouraged innovative startups and aims to leverage the internet to promote the transition and upgrade of traditional businesses. Many problems exist in the traditional taxi industry, so internet-based operations can help utilize untapped resources to better meet consumer demand,” he said.
The legalization of Didi-Kuaidi has sparked public discussion as to whether other car-hire platforms like Yongche, Uber and UCAR can also get licensed. Shanghai Transportation Committee’s supervisor Jianping Sun said any chauffeur platforms will get license if they apply for one. A UCAR spokesperson said it is also applying for such license.
Applications are expected to meet certain requirements. They have to open up their databases to link up official monitoring platform and they have to maintain the platform’s server within the PRC. One industry observer said these requirements might prove to become roadblocks for US-based Uber in its attempt to get an operating license in China.
An Uber spokesperson confirmed that the servers for its Chinese operations is located in China and its strategic distribution in China is no different from its Chinese counterparts. “Uber China is communicating with relevant authorities and actively preparing the paperwork and will follow the procedures for applying for an operating license as a car-hire platform,” she said.
Yongche also confirmed that it is actively preparing the application for an operating license as a car-hire platform.
According to Shanghai Transportation Committee’s Mr. Sun, ride-booking platforms operating in Shanghai must conform to the committee’ guidelines on vehicles, drivers and services.The guidelines stipulate a certain threshold for platform vehicles type, operational time limit for commercial purposes and vehicle class designations. All platform vehicles must have accident and third-party liability insurance bought by the same platform operator.
Mr. Huang said: “It is only possible to make the policy positive by creating a good policy environment that can help resolve major issues arising from operations.” Chauffeur services have come under fire for its drivers’ poor knowledge of city roads, which will not only make it difficult for platforms to improve service efficiency and quality but will also lead to customer complaints. “When service is cheap, users will put up with it. But if prices go up, then the companies will have to train up drivers in order to improve service quality overall,” he said. (Translation by David)
