Tougher Rules for Ride-Hailing Businesses in China

In October, some of China’s largest cities—including Beijing, Shanghai, Guangzhou, Shenzhen, Chongqing, Tianjin, and Hangzhou—rolled out new regulations on internet-based ride-hailing businesses. China has thus become the first country in the world to create a formal legal framework for the sector. The regulations limit the pool of drivers and vehicles, citing concerns about traffic and safety. However, the criteria are discriminatory toward migrants in that they require drivers to have a local household registration or at least to be long-term, tax-paying residents of the city with a temporary residence permit of no less than six months. In recent years, Internet-based ride-hailing businesses have flourished, attracting migrants to work as drivers: in Beijing, more than eighty percent of the ride-hailing drivers are migrants from outside the city. The ride-hailing businesses have also led to protests by taxi drivers who see their businesses squeezed by unlicensed taxi and ride-hailing cars. But ride-hailing car drivers in China have held their own protests: for instance, in March, hundreds of Uber drivers in Hangzhou blocked roads and protested against entrapment by police. Uber China reportedly told its drivers not to clash with police.

(Sources: Bloomberg, Caixin 1, Caixin 2, Caixin 3, The Financial Times)

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