Uber and Didi Face Regulatory Challenges Throughout China

hackingbear writes: Contrary to the central government's wish to boost employment from peer-to-peer economy, the Chinese cities of Shenzhen, Shanghai, and Beijing, who have invested big interest in traditional taxi services, are all looking to pass municipal regulations on ride-hailing businesses that could wipe out many of Uber and Didi's drivers and cars. "There will be a sharp drop in market supply of rideshare vehicles. In Shanghai, for instance, less than 20 percent of existing rideshare vehicles meet the proposed (wide) wheelbase requirements. There will be significant decrease in the number of rideshare drivers. Of over 410,000 activated driver accounts in Shanghai, only less than 10,000 are residents with Shanghai residency registration," said Didi on its social media outlets. In China, ridesharing drivers are usually migrant workers who have few other choices of employments, and rich urban residents are not interested in such jobs. Given the sore state of the economy in China, high unemployment would mean social unrest; the ridesharing economy may prevail at the end as it has become too big to be strictly regulated. Separately, the Chinese government opened an antitrust probe into Uber's sale of its China operations to Didi in September after the announcement of the merger.

Don't they think that external corps are bad?

[NotInHere]

China wants every corporation to be owned by locals, no? Or is stuff changing?

Re:

[Oswald McWeany]

What China is doing, hiding in plain site, is essentially set up a colony model. They want China to be the world's hub where everything is owned and all advanced construction is done. The world will work to supply China with raw materials and China will export, control and distribute to the rest of the world whilst holding the reigns.

Of course a foreign owned company shouldn't be allowed to operate too freely. All capital should be within China.

Convenient but dangerous

[comrade1]

I've used Uber in a handful of developing countries including India and China. It's very convenient to be able to set your ride destination without having to speak with the driver, and it's nice to confirm that they took the proper route. However, twice in India I got drivers that were on meth or some similar drug. In India (not sure about China) some people will buy a small fleet of cars and rent them out to drivers to drive for Uber. Uber already doesn't pay well and since these drivers are losing a cut

Re:

[parkinglot777]

Sounds like china could use another Wall. They've got an immigrant problem too.

I think you shouldn't be trolling if you didn't read TFA or at least take a quick look at the summary (even though often time the summary is misleading). It is NOT immigration issue as you think. It is that people who are not registered as Shanghai residents are living in Shanghai as well. They are all Chineses but have their residence else where in China. They go to a big city to work and temporary live there (rent or live with relatives).

"Of over 410,000 activated driver accounts in Shanghai, only less than 10,000 are residents with Shanghai residency registration," said Didi on its social media outlets.

Chinese

[fluffernutter]

The Chinese are smart enough to realize that these businesses will just feed off their economy and drain it if they are not kept in check.