Can China tame Uber-like taxi services?

Adapted from CCTVNEWS There is little doubt that the taxi business around the world have changed foreve – thanks to ride-hailing Apps such as Uber, Lyft and the likes....

Adapted from CCTVNEWS

There is little doubt that the taxi business around the world have changed foreve – thanks to ride-hailing Apps such as Uber, Lyft and the likes. The trend brings dramatic effects on the cities they operate in and a chance for metropolitan governments to gain better visibility into the running of transport and social services if only they than learn how to leverage use of the digital resources these platforms offer. 

The latest attempt by three of China’s biggest cities, Beijing,Shanghai and Shenzhen, to make sure their cities limit one of the “worst effects” of ride-hailing Apps has split public opinion and might have far reaching consequences. On October 9th, local authorities in Beijing, Shanghai and Shenzhen issued draft regulations demanding that only residents registered in their respective cities could work as drivers for ride-hailing Apps services like Uber or Didi.

 In China, people are registered to a city through a so-called hukou system. A hukou is an identity document associated with a person’s birthplace. People can “relocate” their hukou to another city but not without difficulties, especially if you are trying to move to a more prosperous part of the country, like one of the three big cities mentioned.

Beijing’s municipal transport office explained the draft regulations as an attempt to control the in flow of job-seekers into the capital, which would put extra pressure on the city’s already strained public and natural resources. Beijing has set a population cap of 23 million by 2020. The draft legislation “squared with” the goal, said the office.  

Didichuxing, the firm behind China’s biggest ride-hailing App which recently got Uber skirting out of China, said the new regulations would limit the number of drivers and could lead to less carson street for hire, therefore increasing the price. Chinese netizens have expressed similar worries online in relation to the background check. 

Given that drive hailing services are mostly encouraging alternative employment to a large mass of unemployed folks, the regulation would also lead to automatically screening off those “illegal” residents from partaking in offering lucrative ride services. The flip side is that this could lead to harder to find a rides as there would be less drivers.  

Concern over “geographical discrimination” against perspective drivers from other places will increase as this will encourage a form of  protectionism. However, in light of the  reasons provided, the regulations seems forward thinking and comes at a time when the need for integrating and regulating over the top services is increasingly become an important part of societies digitalization efforts. 

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