The race for market supremacy in China’s ride-hailing market has taken a distinctly legal turn.
Chinese mobile transportation platform Didi Kuaidi today announced that it has received a license from the Shanghai Municipal Transportation Commission (SMTC) to run private-car-booking services in the metropolitan city. It comes on the same day as U.S. rival Uber announces the official registration of their China subsidiary in Shanghai’s Free Trade Zone, also hoping to snag a license.
Didi Kuaidi has said that the license makes their services the first legally-authorized online private car booking platform in China.
Operating under the new license, Didi Kuaidi have promised to maintain the quality of vehicles and drivers registered on its platform by providing necessary training, as well as conducting rigorous screening of potential drivers.
The new license requires mandatory insurance, third-party liability insurance, carrier’s liability insurance and passenger insurance, which provide coverage up to 6 million RMB per annum per vehicle. Didi Kuaidi will also add dedicated customer service channels to ensure passenger protection.
The company earned the newly-issued private car license by meeting all criteria set by the SMTC, this includes the requirement for all drivers to hold a public driver license along with other qualifications. Their servers must also be located in China, allowing the government to control and access data centers. As part of Uber’s announcement today they also revealed they would be seeking to meet this requirement in order to get the same license.
Regulatory issues have long been a headache for China’s booming car-hailing companies. All major companies in this arena have been taking steps to obtain legal status.
As the first company to acquire such a license, Didi Kuaidi is moving one step ahead of its arch competitor Uber in obtaining government backing. Uber China announced the are “actively preparing relevant documents and materials, and ready to apply for internet-car-hailing platform permits following designated procedures after the new regulations come out.”
When responding to whether the SMTC is issuing the license to more companies in the near future, Sun Jianping, director of the commission, expressed that “we have set out certain criteria for car-haling companies and the license is open to all companies that could meet these requirements”. He disclosed that Uber is one of the companies seeking this license.
Together with the licensing news, Didi Kuaidi also announced some key metrics for the platform. Originally a taxi-hailing app, Didi Kuaidi has now expanded its service, including taxi hailing, premium car, carpooling and bus sharing, to 360 cities in China through its mobile apps, servicing 200 million people in total.
The company currently processes approximately 3 million private car orders and 3 million taxi rides each day, representing over 80% of the private car service market and over 90% of the taxi hailing service market in China, according to the company.