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24 March 2015, Tuesday, 19:11 (Hong Kong)

China clamps down on private cars charging for rides, Uber’s legal status currently unclear

China’s Ministry of Transport issued a statement on its website yesterday saying that authorities are cracking down on private cars charging for rides. It represents a significant roadblock to Uber and rival apps that aggregate cars from numerous livery companies and make them accessible to customers via an app.

“While we encourage innovation, we prohibit private cars from using platforms to participate in the ‘hired car’ business,” said a ministry announcement picked up by the New York Times.

However, Uber’s legal status is unclear in China after this announcement. The Ministry of Transport directive mentions no apps by name. It might transpire that Uber’s and Yongche’s fleet of high-end “black cars” is permitted, but car-sharing and ride-sharing where a fee is involved is not. In that case, UberBlack would be permissible, but the cheaper UberX would be prohibited. The vague statement means there’s no solid answer yet.

Uber first rolled into China in August 2013 with a debut in Shanghai. It now covers nine cities in mainland China. Chinese search engine giant Baidu invested in Uber last month.

Uber hasn’t yet commented on social media or its blog, and an Uber executive in Asia has not yet responded to our queries. (Source: New York Times)

«South China Insight», 23.01.2015

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