China car-hailing services

CNC
Added On November 7, 2016

Regulators in major Chinese cities rolled out strict requirements for car-hailing services in October.
 
It has caused nationwide repercussions and doubts over their sustained operation.
 
Beijing, Shanghai, Guangzhou and Shenzhen, the four most developed cities in China, separately issued draft local regulations.
 
It featured a number of restrictions concerning drivers' hukou, a household registration system, car plates, vehicle model and age, and compulsory insurance.
 
All four cities demand that vehicles must be registered locally.
 
Beijing and Shanghai, the two cities with the most strict household registration system in China, require that drivers have a local hukou, meaning people from other cities will not be able to provide services there.
 
However, car plates in Shanghai and Beijing are notoriously difficult to acquire. 
 
Potential car owners in Beijing often wait years before winning a license-plate lottery. And residents in Shanghai need to pay a large sum of money in a plate auction held once a month.
 
The regulations also raise the threshold for vehicles allowed to provide such services, including the width of the wheelbase, engine size and vehicle age.
 
The periods for soliciting public opinions were seven days and two weeks for Beijing and Shanghai respectively, which are shorter compared with usual practice.
 
In response, China's largest online car-hailing platform Didi Chuxing issued a statement, saying these measures are in fact limitations that forcibly raise entry barriers.
 
It said such restrictions will result in the exclusion of large quantities of vehicles, except for higher-end cars that were far more expensive than most taxicabs.
 
Passengers showed mixed attitudes towards the regulations.
 
SOUNDBITE(Chinese): Shanghai resident
"I often use Didi. If it is as convenient as before, there will be no difference. But if the number of cars reduces sharply, it will be inconvenient."
 
SOUNDBITE(Chinese): Car-hailing driver in Shanghai
"There will be less cars, as many drivers are from places outside of Shanghai."
 
SOUNDBITE(Chinese): FU WEIGANG, Executive President, Shanghai Institute of Finance and Law
"If the cost of calling a car is higher, the price will increase. If there are less cars, drivers' income will be affected."
 
Many welcomed the new rules out of safety concerns.
 
SOUNDBITE(Chinese): Shanghai resident
"There are frequent criminal reports about those cars. The new policy makes me feel safe."
 
SOUNDBITE(Chinese): Shanghai resident
"Of course there should be certain requirements for drivers. As a passenger, if I get on a car and the driver is not qualified, I don't know where to find him if I left my belongings on the car."
 
According to transport authorities in Beijing and Shanghai, the two most populous cities in China, the requirements were aimed at controlling population size.
 
Beijing has long suffered from "urban diseases" such as traffic congestion and air pollution. 
 
Excluding "non-Beijing" drivers and vehicles will help relieve an overburdened capital.
 
China unveiled its first nationwide regulations for car-hailing services in July, granting legal status to car-hailing services.
 
But for a long time, concerns over safety and market disorder surrounding the industry never ceased to appear in headlines.
 
Guo Jifu, president of Beijing Transportation Research Center, said the reforms will be meaningless if the government turns online car-hailing vehicles into another fleet of old-fashioned taxi cabs. Such reforms should not stifle innovation.
 
SOUNDBITE(Chinese): GUO JIFU, President, Beijing Transportation Research Center
"Car-hailing services is public services, a detailed and strict regulation is necessary. The key of the regulation is that the car-hailing services should be encouraged. Old-fashioned taxi cabs should also transform its services."