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China to legalize ride-sharing Uber and Didi

07/28/2016| 9:21:20 AM| 中文

China’s transport ministry issued the final version of a policy to regulate the booming ride-sharing services on July 28. The rules will take effect on November 1, 2016.

Key points in the ministry document:

* Online ride booking services are legal
* Government will encourage development of the sharing economy
* It will encourage online car booking and non-cash payments 
* Drivers must have a minimum of three years of driving experience
* Cars must be retired from service after upon reaching 600,000 km
* Cars cannot exceed seven seats 
* The rules will be implemented on November 1, 2016

The regulation puts an official stamp of approval on the ride-sharing services that already cover hundreds of cities and transport millions of people daily.

The government will now encourage private auto-sharing -- including car-pooling -- but require vehicles to install safety features such as security alarms and GPS. All drivers must register with local taxi regulators and cannot have criminal records, according to the document.

Drivers can sign different types of labor contracts and agreements with car-hailing platform companies according to their times of work and frequency in using the apps.

Car-hailing platform companies have to shoulder more responsibilities in securing the interests of both drivers and passengers, arranging rides, setting standards and prices and choosing drivers, according to the new regulation.

The ministry started mulling over the regulation about two years ago. It issued a draft in October last year, which was criticized by many experts for some rules, such as that private cars must be registered as "taxis" and companies needing to sign labor contracts with drivers.

China’s new regulations clear the way for both parties, as well as smaller players such as Yidao Yongche, to compete freely for drivers and riders in one of the world’s most pivotal competitive arenas for ride-sharing.

The regulation will legitimize an industry that has had to navigate regulatory roadblocks in many countries across the globe, including on Uber’s home turf of the U.S.

TAGS: Uber | Didi | car-hailing | chauffeured car service | China
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