Uber gets no grief yet in taxi-app ban

Updated: 2015-01-12 14:19

By LIAN ZI in San Francisco(China Daily USA)

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Uber, the San Francisco app-based transportation and taxi company, seems to have escaped China's crackdown on cab-hailing apps.

"The business is running as usual," Huang Xue, spokeswoman for Uber in Shanghai, e-mailed China Daily on Saturday.

China's Ministry of Transport announced Thursday: "Every (cab-hailing) app company should abide by transport market rules, take their responsibilities seriously, and ban private cars from operating on their platform," even though the ministry saw a "positive role" for apps that work with licensed operators in serving the differentiated transportation market.

Unlike some reports that Uber would be hurt the new regulations in China, its operation was not impacted much.

Chinese authorities are mainly concerned about apps that allow hail lifts from cars that are privately owned, the spokeswoman said.

"However, unlike acting as an app-based cab-hailing company that collaborates with private drivers in other countries, Uber transformed its business model in China and works only with licensed car-rental firms.

But it is still unsure whether the company's "People's Uber", a ridesharing program that will be stopped under the new rule, even though it hasn't been profi table.

The service aims to match private drivers with people looking for a lift, and the only money exchanged is what the passenger pays the driver to cover the gasoline costs.

Uber didn't immediately reply to a message seeking comment on "People's Uber".

The company also said it will work with authorities on adopt appropriate regulations for new technologies that can help solve urban transportation issues.

"Uber respects the key role the government plays in ensuring that its citizens have access to safe, affordable and effi cient transportation options," the spokeswoman wrote.

"We are also pleased to see the Ministry of Transportation confirming the value and benefi ts that innovative mobile Internet technologies bring to the transportation industry."

"It is right for Uber to localize its strategy and give up its app-based private taxi model in China," said Zheng Yuhuang, a marketing professor at Tsinghua University.

"Collaborating with local legitimate car-rental firms, especially those state-owned ones, could help Uber fi t the Chinese legal system and market."

The company still faces hurdles expanding in China because the ride-hailing business is still in a gray area.

                                                                                               (China Daily USA 01/12/2015 page2)