Authorities in Beijing and Shanghai have introduced strict and controversial regulations on car-hailing apps. Popular Chinese app Didi warns the new rules will force over 90 percent of its drivers in Shanghai out of business. CCTV's Han Peng reports.
Lei Lianchen has lost his job. He was one of the first drivers to work for Didi, China's car-hailing app, and used his private car to offer paid rides in Beijing. He says he earned around 10,000 yuan, or 1,500 US dollars, a month - almost twice the salary of a traditional taxi driver.
"I can no longer drive now, because my car has a license plate from Heibei province, not Beijing. Plus I'm a resident of Henan Province. Furthermore, my car model doesn't fit into the new regulations," he said.
On Wednesday, authorities in China's biggest cities imposed some strict limitations. Beijing and Shanghai now require all drivers for car-hailing apps to be permanent residents of the city and their cars must be registered locally. Compact cars like Lei's have also been banned.
The new policy has caused huge controversy, with many saying that from now on only successful, upper middle class people will be qualified to apply for jobs.
"The government is trying to separate Didi's customers from those of traditional taxis. The purpose is to buy time for reforms to the traditional taxi system, because the government believes that if Didi makes traditional taxi drivers lose their jobs, it's a threat to social stability," said Zhu Wei, China University of Political Science and Law.
Authorities say the purpose of the regulations is not local protection, but safety concerns.
"The regulations aim to ensure safety and better services for customers. When private cars are being used as taxis, local government must have sufficient information about the cars and their drivers in order to track them down," said Ma Rui, Vice Director of Beijing Transport Bureau.
The Didi company did not take our interview on this issue. But they released a tough written statement in response to the draft regulations. They say the new measures, if adopted, will push millions of drivers out of their jobs and make getting a taxi once again a notoriously difficult process for passengers.
Take Beijing for example - there are around 66,000 traditional taxis in the city, an increase of 10,000 from a decade ago. But in the last 10 years, the population of the city has doubled, and taxis have become significantly more affordable to residents.
"Before this app came along, I used to drive an illegal taxi at the airport. Now that I've lost my job, I'm considering doing it again, because after all, I have to make both ends meet," Lei said.
A long standing dilemma between passengers' convenience and safety protection... It's still unclear whether the new regulations will represent a step forward or backward for this booming, innovative industry.
