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China Bans Private Drivers in Taxi App Clampdown

China Bans Private Drivers in Taxi App Clampdown

By Reuters | Updated: 9 January 2015 16:47 IST

China's transport ministry has banned taxi hailing apps such as Uber Technologies Inc and local rivals Kuaidi Dache and Didi Dache from using cars and drivers without taxi licences in a bid to regulate the rapidly growing sector.

The nationwide ban comes after authorities in the Chinese city of Chongqing began investiating Uber in December over concerns that its drivers were not properly licensed.

"Every limousine app company should abide by transport market rules, take their responsibilities seriously, and ban private cars from operating on their platform," the Ministry of Transport said in a statement late on Thursday.

"This will allow passengers who use these services to travel at ease."

The statement did not name any taxi hailing apps.

Uber, backed by Chinese internet giant Baidu Inc, has also come under fire in other countries over licensing issues. The company, through its apps, charges a fee to play matchmaker between passengers and drivers, some of whom are registered taxi drivers.

The U.S. company is a comparative latecomer in China, where taxi app users are set to triple to 45 million by 2015 compared with 2013, according to Chinese research firm iResearch.

Local apps Kuaidi, backed by Alibaba Group Holding Ltd, and Didi, in which Tencent Holdings Ltd has a stake, hold between them around 90 percent of China's taxi app market.

Uber, Kuaidi and Didi were not immediately available for comment.

© Thomson Reuters 2015

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