(ECNS) -- The southern Chinese city of Guangzhou is planning to introduce its own taxi-hailing service as business booms for private Internet-based companies like Uber and the local Didi, Southern Daily reported.
Work to develop the Ruyue (by appointment in English) app, which is supported by the city's Traffic Committee, began in January and internal trials in February.
After participating in tests, taxi driver Chen Ming said the app has three main function options: immediate use, reservations, and a pick-up service. Ideally, the app would help users find a taxi within eight minutes.
A total of 2950 taxis, mostly from state-owned companies, have registered with the system, allowing users to book a ride via telephone, Internet or through the app itself, once it begins operation.
Su Kui, the committee's director of passenger transportation management, said the system represents an innovation in terms of taxi management and will use medium and high-end cars while drivers as employees are free of operational risks or other fees.
It was added that more than enough time has been spent testing the system to better provide services.
An official from a state-owned taxi company said Guangzhou would ensure that cars are legal and safe, with some taxi-hailing services run by Internet-based companies not meeting such criteria.
However, it is estimated that prices obtained via the app would be three times higher than when using a taxi in the traditional way and about five times higher than when using taxi-hailing touts. Currently, taxi-hailing app operators often offer a large subsidy to drivers or users in order to expand their market share.
An insider said state-owned taxi companies have no funds to compete in the price war with Internet giants, but that their strengths lies in safety and experience of drivers.
Ding Li, a professor of economics at the Academy of Social Sciences of Guangdong Province, said the government would be better off mapping out the rules and ensuring sound development of new companies instead of jumping into the market themselves.
