China has given the green light to online ride-hailing services that previously were used in the country but were not rule governed. This has just changed.
The new rules outlined on Thursday take effect on Nov. 1. They were immediately welcomed by Uber and Didi, which have invested billions of dollars to attract riders with discounts while operating in a legal gray area in most of China.
The rules require drivers have a minimum of three years’ experience behind the wheel and pass a crime check. They also stipulate that cars used for rides must not be more than eight years old or have more than 600,000 km on the odometer.
While globally Uber leads the sector, Didi claims 87 percent of the Chinese market for private car service.
“We welcome the new regulations, which send a clear message of support for ridesharing and the benefits that it offers riders, drivers, and cities,” Zhen Liu, senior vice president of corporate strategy with Uber China, said in a statement.
“This is a welcome step … and we look forward to working with policymakers around the country to put these regulations into practice.”
Didi also welcomed the rules, saying they reflected an open mind on the part of the government with regard to car-hailing and the sharing economy.
“DiDi will make an earnest effort to comply with the new rules and adopt its corresponding standards. Soon we will initiate the application for the appropriate licenses,” it said in an open letter.
The rivals have raised massive sums to compete in China. Didi raised $7.3 billion in its latest round of funding in June and Uber received nearly $2 billion from Chinese backers in January.