Uber car-hailing faces Beijing crackdown

Car-hailing apps such as Uber are facing a crackdown against "illegal" taxi drivers in Beijing, making the city the latest in a long line of trouble spots for the San Francisco-based start- up that has sought to disrupt city transport worldwide.

Liang Jiangwei, director of Beijing’s traffic enforcement unit, said the use of unlicensed taxis by internet hailing apps violated a ban on illegal taxis. He said a crackdown began on January 1st, and drivers face fines of up to 20,000 renminbi (€2,700). “Some of these vehicles are ‘taxi clones’,” he said. “Many passengers have filed complaints.”

According to the Beijing Youth Daily, a state-run paper, this is the first time that Beijing has publicly affirmed that private cars operating via taxi apps is considered an act of illegal operation.

The Beijing traffic enforcement unit did not respond to requests for confirmation of the announcement carried in the paper and has posted nothing on its website.

The crackdown appears to have been set in motion following lobbying efforts by Beijing’s established taxi companies, which operate cabs whose prices are capped at below-market rates by state fiat.

Internet companies operate private car service apps in China that may be affected by the action – Didi Dache, part- owned by internet group Tencent; Kuadi Dache, which counts ecommerce conglomerate Alibaba as an investor; Uber, which launched in China in 2014 and operates in nine cities, and is backed by Baidu, the Beijing-based search engine; and Yongche, an independent company that operates a car- hailing app.

In addition, Didi and Kuadi operate taxi hailing apps that work exclusively with licensed taxis, which would not be affected.

Kaudi Dache, whose Kuadi One is a private car operator, appeared to dispute the accusation that its premium-rate service competed with lower- priced regular taxis, or that it violated the law.

The company said: “Our services are based on co-operation with legitimate car-rental companies and labour service companies.

“The transportation needs of both everyday consumers and higher-end passengers are largely unmet. Kuaidi One is oriented towards the upper-end market, and complements the regular taxi services,” it added.

Uber operates both premium car service Uber Black and newly launched People’s Uber, which is priced to compete with regular taxis in Beijing. The company said they were looking into the matter and planned to issue a statement. – Copyright The Financial Times Ltd