China’s plan to legalize online ride-hailing services, such as Uber and DiDi Chuxing is finally going into effect in November.
Although the proposal was passed on Thursday, Uber and its competitor, DiDi Chuxing, have been operating in a gray area in China for years.
Uber is already running in 60 cities in the country. There are plans to expand to 30 more cities in the next few months, the company said in a blog post.
Thus, China is imposing new regulations for such services, according to the New York Times. Not only do the drivers need three years of experience but also a license from a local taxi regulator. On top of that, they must not have any criminal record.
“While the details of how these regulations are implemented will fall to cities and provinces, this is a welcome step in a country that has consistently shown itself to be forward-thinking when it comes to innovation,” Uber’s senior vice president for corporate strategy in China, Zhen Liu, wrote in the post.
Cars are also required to have GPS tracking and must have driven less than 600,000 km, according to Tech Crunch. In addition, cars cannot have more than seven seats. Plus, user information and data collected by the services must be kept within China for a minimum of two years.
However, the rules are more lenient than an earlier draft of the regulations. Missing from the current version is banning the usage of private cars for the ride-booking services. Limiting the number of available licenses for drivers is also not not present in the guidelines.
“Modern regulations can let these services grow while ensuring public safety and protecting customers,” Liu added. “We look forward to working with national and local governments to put these regulatory guidelines into practice.”
DiDi Chuxing, the leading online ride-booking service in China, has similar sentiments.
According to Tech Crunch, the company said in a statement:
“As a member of the rideshare community, DiDi welcomes the government’s endorsement and encouragement of the industry and China’s emerging sharing economy. We believe the rules will usher in a new stage of growth for China’s online ride-booking ecosystem and that DiDi is prepared to meet these new requirements.”
Yet, both Uber and DiDi Chuxing expressed concerns over what problems may arise from the regulations. The latter is worried about the licensing procedure and hopes there will be separate guidelines for part-time drivers.
