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Govt issues guidelines on ride-on-demand services

China’s transport authorities are mulling to overhaul the country’s taxi industry. They have issued guidelines to focus on how to manage the fast growing ride-on-demand service sector, and how to reform traditional taxis.

Finding a car to bring her home. That’s what Yang Rong has been doing every day after work after her pregnancy. Hard to grab a taxi in rush hours, ride-on-demand cars find Yang a way out of the city’s crowded traffic.

“It only takes me less than 37 yuan to get home. Very cheap. Taking traditional taxis would charge me at least 50 to 60 yuan in a rush hour. And the best part is that when I get off, most drivers will help me move my belongings because I’m pregnant,” Yang Rong said.

Easy to call, cheap in fares, together with quality services. Ride-on-demand service might be a much-needed boost for the industry. But transport authorities warned problems could emerge, and decided to release guidelines to manage the sector, along with a reform on traditional taxis.

“Firstly, taxi operating hours are long. The cruising taxis are especially low in efficiency, and take up a lot of road resources. They are not economical, and contribute to congestion. Secondly, we need to prevent companies from blindly entering the market. This could lead to a decrease in traditional taxis’ quantity and quality,” said Xu Yahua of Ministry of Transport.

According to the guidelines, monthly franchise fees of traditional taxis should be re-negotiated to lessen the burden on drivers. And for ride-on-demand cars, the service operators should make their data accessible to transport authorities.

“Now we have finished the establishment of our independent operation, and the localization process. We have communicated with local governments and will apply for qualifications and licenses needed for ride-on-demand cars as soon as possible,” said Bei Xiaochao, head of Public Affairs & Marketing, Uber China.

The guidelines also require all ride-on-demand car drivers to have more than 3 years of driving experience. And such cars are required to register like their traditional taxi peers.

The new regulations also stipulate that ride-on-demand cars can only provide car-booking services, but not cruising and taking passengers randomly on the streets.