Online car-hailing services need supervision, but they're here to stay: experts
A Shanghai-based taxi company has written a letter of complaint to the Ministry of Transport (MOT), saying that online car-hailing platforms such as Didi Chuxing and Uber represent unfair competition, according to a statement the Shanghai company sent to the Global Times Thursday.
In the statement, Shanghai Dazhong Taxi & Car Leasing Co said that there is serious "unfairness" in the conduct of online car-hailing platforms. Didi and Uber-like enterprises allow private cars to provide transport services via their platforms, a practice that violates "certain regulations," it said.
The letter said taxi companies are subject to very strict regulations on taxes, insurance as well as car and driver management, while online car-hailing platforms don't have to follow these standards, imposing an unfair burden on taxi companies.
This is not the first time that taxi companies or drivers have publicly shown their anger toward online car-hailing companies. Taxi drivers in Xi'an, capital of Northwest China's Shaanxi Province, and Qingdao, East China's Shandong Province, have launched strikes recently in protest against online car-hailing platforms.
"These online car-hailing platforms have caused us losses," a Shanghai-based taxi driver surnamed Liu told the Global Times Thursday, claiming that his income every day is 50 yuan ($7.6) less as an increasing number of people prefer transport services provided via car-hailing apps.
Neither Didi nor Uber replied to the Global Times' interview request on Thursday. The MOT did not reply as of press time either.
"Certainly the online car-hailing sector needs regulation," Zhao Zhanling, a lawyer at the Beijing Zhilin Law Firm, told the Global Times Thursday.
But he believes that the government won't ban such services, since there is already a huge market and a ban would hurt the public interest.
"But the threshold needs to be raised [for private cars to offer transport services]," he said.
Zhao also said that the taxi industry itself needs to reform and embrace the competition from Didi-like companies. The cost for taxi operation is too high, partly due to the fact that in many places taxi companies must pay certain government-mandated operating fees, and this can be improved.
The MOT released draft regulations on online car-hailing companies for public comment in October 2015. Those draft rules didn't legitimize the practice of private cars offering transport services via online car-hailing apps unless they are registered as commercial vehicles instead of private cars. The draft document also raised other requirements, for instance, that car-hailing platforms should buy insurance for their customers.
"The draft was very controversial," Zhang Xu, an industry analyst at Internet consultancy Analysys International, told the Global Times Thursday, noting that it was considered by many people as too strict for car-hailing companies, an innovative sector that the government should encourage.
The statement from Shanghai Dazhong also cited safety issues as a reason for tighter regulation of its competitors. Some recent news events appear to support this point. In one extreme case, a woman in Shenzhen, South China's Guangdong Province, was reportedly murdered by a Didi driver in May. There was also a report about a female customer of Uber being sexually harassed by the driver.
"The sector does need more regulation, and at the same time the companies themselves need to make managerial improvement," Zhang noted.
The sector is making progress in this regard. For instance, Didi released a security guide in March. At the time, it conducted a trial function to offer speed dialing to the police via its app and said it would invest some 100 million yuan each year to improve safety, media reports said.
