BEIJING -- The Ministry of Transport prohibited private cars from taking and charging passengers using taxi-hailing apps after local authorities cracked down on unlicensed drivers using apps.
The ministry ordered app developers to ban private cars from their service to ensure that all vehicles are owned by taxi or car-hire companies out of concern for passenger safety.
Under Chinese law, a private car owner can not take passengers for profit, however, some vehicles offered on the basis of taxi-hailing apps are privately owned by their drivers.
The Shanghai government detained 12 drivers using taxi-hailing app Didi Dache, one of the most popular, and fined each driver 10,000 yuan ($1,630) in December. Beijing authorities have also started to get tough with private drivers acting on their own initiative.
The action against the drivers has caused some discontent as the vested interests -- taxi companies -- are untouched.
The ministry said it recognized luxury car pick-up services, which it described as an innovative model, blurred the boundaries between taxis and car rental businesses.
The ministry encouraged innovation, it said, and wanted the business to develop in an orderly manner, in accordance with the law.