China aims to tighten oversight of online private-car-hailing services, posing a new challenge to firms such as Uber and Didi Kuaidi which are seeking faster growth in the market.
According to draft rules published by the transport ministry over the weekend, online private-car-hailing app providers must place their servers in China, share their data with local transport authorities and register their cars as taxi services, the Wall Street Journal reported.
The firms will also be required to sign labor contracts with their drivers and insure their cars and passengers.
In addition, foreign firms must obtain a license to carry out telecommunications business in China and are subject to national security checks, the ministry said.
If strictly enforced, the proposed new rules could crimp the operators’ carpooling services in the country and increase their costs.
One draft measure forbidding drivers from working for multiple ride-hailing app providers at the same time also raises the possibility the regulations could be used to tip the balance toward a favored provider in China, the Journal noted.
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