Beijing has launched a crackdown on private drivers using cab-hailing apps, citing safety concerns. The ban is aimed at private citizens taking advantage of increasingly popular taxi hailing apps, including Alibaba-backed Kuaidi Dache and Tencent’s Didi Dache. While the apps are still available for licensed drivers, the announcement has effectively snuffed out private ride-sharing in China.
Authorities will be on the lookout for private drivers using the apps from this month, according to a statement on the Transport Ministry’s website on Tuesday. The statement confirmed that private luxury and “limousine” services would not be affected by the ban, describing them as an “innovative models.”
The services remain legal for licensed drivers and taxi companies, who have previously expressed widespread discontent at the off-market use of the apps by private drivers. It is possible this week’s statement – the first official announcement regarding their legal position – is a reaction to growing pressure from China’s taxi firms.
The ban affects several apps, but does not explicitly ban any specific service, such as Uber, which does not currently offer for-profit private hailing services in China. The company recently launched a pilot service titled ‘People’s Uber’ in Beijing, as an experimental not-for-profit private service.
It’s unclear whether the pilot will be affected by the crackdown, considering the law only regulates for-profit drivers. However it’s now almost certain the experimental service won’t evolve into a profit-driven model, given the announcement.
The leading taxi-hailing apps Kuadi Dache and Didi Dache will be the most strongly affected, though considering their widespread use among licensed taxi companies, the ban is to significantly affect their bottom line. Both companies claim their apps are in use in over 300 cities across China.
Currently, neither service has monetized the hailing portion of their app. Unike Uber, they act purely as a liaison between drivers and passengers, with no portion of the passenger fares going to the apps. Their ease-of-use has however made them susceptible to use by off-market ‘black’ taxis.
The ban has already been affirmed in several other cities including Shanghai, Nanjing and Shengyang. According to a follow-up statement this Thursday, twelve private drivers were detained in December in Shanghai for using the app. Coastal city Qingdao also revealed this week that it will be launching a crackdown on unlicensed drivers, though no city so far has suggested a blanket ban of the apps themselves.
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Editing by Mike Cormack (@bucketoftongues)