Bad news for those who rely on car-hailing apps to get around the traffic-clogged streets of Beijing and Shanghai.
China’s two biggest cities have announced plans to tighten control over illegal car-hailing operations, including popular apps Uber and Didi Kuaidi.
The head of Shanghai’s Municipal Transportation Commission told Xinhua on Sunday that “the city encourages private car services to complement traditional taxis, but only those that operate legally,” reports China Daily.
To be deemed a legal ride-hailing service, companies must purchase traffic accident liability insurance, pay income taxes, create a reporting mechanism to handle passenger complaints and train their drivers.
Drivers in Shanghai have been threatened with RMB10,000 fines and could have their licenses suspended for at least three months if they are caught during the crackdown.
Meanwhile, in the capital, the Beijing government last week summoned the heads of Didi and Uber to accuse them of tax violations, sending junk text messages, being involved in unlicensed for-profit operations and causing traffic congestion.
No word yet on when the crackdown will begin or how strictly it will be enforced. Uber has already been targeted several times by local governments across the country, but continues to flourish in China. Uber CEO Travis Kalanick recently predicted China will surpass the US to become the company's biggest market by the end of the year. He may have to revise that forecast if authorities get tough.
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