Chinese city to launch rival transport app weeks after police close Uber offices

Launch of new company raises questions about Guangzhou’s commitment to a level playing field

Taxi apps – both Chinese and foreign – face attention from law-enforcement agencies in many Chinese cities due to prohibitions on unlicensed operations. Photograph: Andrew Matthews/PA Wire

Taxi apps – both Chinese and foreign – face attention from law-enforcement agencies in many Chinese cities due to prohibitions on unlicensed operations. Photograph: Andrew Matthews/PA Wire

 

Guangzhou’s municipal government is planning to launch its own Uber-like online taxi hire service, only weeks after police closed the San Francisco-based transport app’s office in the southern Chinese city.

The new company Ruyue (“by appointment”) will offer rides to customers using a smartphone app. The journeys will be provided by the four taxi companies with licences to operate in Guangzhou, which had faced competition from Uber before it was shut down.

The timing of Ruyue’s launch – weeks after Uber was taken out by a police raid – has raised questions about the city’s commitment to a level playing field.

“It is hard to say for sure whether the crackdown against Uber in Guangzhou was directly related to this new app, but I think it is natural to make the connection,” said Zhang Yi, head of iMedia, an internet consultancy in Guangzhou.

State-run companies that dominate many sectors face pressure from nimble internet companies that can disrupt inefficient markets such as transport and financial services.

However, taxi apps – both Chinese and foreign – face attention from law-enforcement agencies in many Chinese cities due to prohibitions on unlicensed operations.– Copyright The Financial Times Limited 2015