Regulation

China Issues First Guidelines For Ridesharing Industry

Ridesharing services, like Uber, aren’t only the domain of the U.S. and Europe. They are now making their way to China in a more official and supportive manner.

According to a report, China’s Cabinet released its first rules governing ridesharing, telling local officials on Thursday (July 28) they should move full steam ahead to promote the industry made famous by Uber.

A Cabinet document laid out the guidelines for registrations, fares, employment of drivers and how much they should get paid. The Chinese government said the details for each city is up to the local officials, but the Chinese government wants them to encourage, support and aid the companies in the ridesharing industry.

Last year, services like Uber were banned in China from relying on taxi drivers that didn’t have taxi licenses after taxi drivers complained. To get around that, companies like Uber and Didi Chuxing partnered with vehicle rental companies. Uber’s offices were raided multiple times last year by Chinese authorities as it faced charges of running unlicensed taxi services.

The new rules issued by the Chinese government are welcome news to the ridesharing startups. Uber, which has operations in greater than 60 cities in China, was happy about the news, saying in a statement that it looks forward to working with both the national and local government in the region to put the new guidelines into practice, while Didi called the rules a milestone in China’s march to develop the ridesharing industry. It said it thinks the new rules will prompt new growth for China’s online ride-booking ecosystem. Didi has operations in around 400 of China’s cities and completed 1.4 billion rides last year. The company raised $7.3 billion in June from investors in what was billed as one of the biggest rounds of private equity fundraising.

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