CHINA TOPIX

11/22/2024 02:23:20 am

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Uber's Legal Status in China Still Uncertain

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(Photo : Reuters) The city of Beijing is cracking down on private cars that use taxi-booking software similar to Uber.

Transportation mobile app company Uber still faces uncertainty with providing its services in China following a recent announcement from China's Ministry of Transport about a crackdown on private cars charging for rides.

A spokesman from the Beijing Transportation Committee confirmed Friday that regulators are still discussing on whether or not to allow private transportation taxi services in China's capital.

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The unknown spokesman mentioned that there is currently no set date for a decision. However, Beijing's decision to allow Uber's services will likely not come until the Ministry of Transport further explains the goal of cracking down on private taxi services, as its announcement wasn't very clear.

"While we encourage innovation, we prohibit private cars from using platforms to participate in the 'hired car' business," said a ministry announcement two weeks ago.

Many speculated that this would mean a complete ban of Uber in China, but the ministry never mentioned any specific names of companies and were very vague as to what exactly would be prohibited.

Considering the vague statement, there is still no definitive answer on whether Uber would legally be allowed to offer its services in China. Uber could very well have one of its services prohibited, but still be operable in the country.

For example, the UberX service, which essentially allows anyone with a newer four-door vehicle to be eligible as a driver, could be banned as the service poses security threats for passengers. However, the UberBlack service, which requires certified drivers with high-end black cars, could be permitted.

Meanwhile, Uber presumably hopes its recent US$600M investment last month from Chinese Internet company Baidu will help swerve the decision of China authorites in its favor. 

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