China has laid out new rules that will legalize ride-hailing apps in a move welcomed by the country's two largest players, Didi Chuxing and Uber.
Some of the key points outlined by the Chinese government are:
- Drivers must have a full license and three years' driving experience as well as no violent criminal record or driving offences
- Data protection for users
- User data must be stored and used on mainland China and should be kept for a minimum of two years
- Drivers must sign a "labor contract" with the ride-hailing services which gives them "rights and obligations"
- Cars used for rides cannot be more than eight years old or have done over 600,000 kilometers
The rules leave some room for local authorities to set terms such as pricing limits.
Ride-hailing apps have fast become a booming and emerging industry, but often Uber in particular has run into in a number of countries around the world.
In China, Didi claims to have over 80 percent of the market share but along with Uber, it has been investing billions in the world's second-largest economy to gain market share. Both start-ups welcomed the new rules.
"We welcome the new regulations, which send a clear message of support for ridesharing and the benefits that it offers riders, drivers, and cities. This is a welcome step in a country that has consistently shown itself to be forward-thinking when it comes to business innovation. Uber China is regulation-ready, and we look forward to working with policy makers around the country to put these regulations into practice," Uber said in a statement.
Didi echoed the sentiment.
"We believe the Rules reflect the government's open-minded regulatory approach to the mobile car-hailing industry in the broader context of the sharing economy," Didi said in a statement.
"Soon we will initiate the application for the appropriate licenses."
Didi, which recently took a $1 billion investment round from Apple, added that it would invest 100 million yuan ($15 million) to launch a development fund "to accelerate the integration of the online ride-hailing and taxi services through strategic partnerships with regulators, taxi companies and drivers".
Uber and Didi have been battling head-to-head in the past year, raising and investing billions more to try and win in China. Earlier this year, Uber revealed it was losing more than $1 billion a year in China, while the chief executive Travis Kalanick told CNBC in march that some Chinese cities will be profitable in two years.
