China Issues Mobile Car Hire Service Regulations
Ministry of Transport, 10/10/15
China's Ministry of Transportation (MOT) today released regulations for operating online and mobile car hire services which will be implemented beginning November 9 this year.
The MOT defines online and mobile car hire services to be platforms that rely on the online ecosystem to provide users with a qualified driver and vehicle, and which rely on supply and demand market forces to provide car hire services.
Key stipulations under the new regulations include:
1. The cost of online and mobile car hire services will either be determined by the government or the market.
2. Online and mobile car hire services must obtain all the necessary operational licenses, and must submit reports to the relevant government communications departments. Servers must be based in mainland China and data must be made available to the local transportation monitoring department.
3. Car hire services must use cars with fewer than 7 seats, be registered as rental cars, and have a GPS and emergency warning device installed. Municipal governments can adapt the regulation to meet their own requirements and determine specific vehicle standards, how long a car can be operated, as well as vehicle identification requirements.
4. Drivers for car hire services must obtain a driver's license and have at least 3 years of driving experience, meet all safe driving conditions, and pass a car hire service examination to obtain the required related license.
5. Car hire service operators must guarantee the legality of the cars and drivers that use their platform, publish quality of service commitments, establish a service evaluation system, have a clear pricing system, provide passengers with the relevant invoices, and purchase insurance covering passengers. Car hire service operators must also post announcements of any marketing promotions 10 days before promotions are launched.
6. Car hire services are forbidden from operating under the pretense that they are private coach or carpooling services. Car hire services are also forbidden from picking up passengers who are hailing a car on the side of the road. Drivers may only work for one car hire service platform, and are forbidden to use multiple car hire services to pick up passengers.
7. China's government must also establish a multi-agency supervision mechanism to strengthen oversight of car hire service operators.
Editor's Note: For more information on this topic, please see "Rumor: China to Issue Online Car Hire Service Regulations," MD 9/10/15 issue. Following the announcement of the new regulations, an Uber China spokesperson stated that "The draft regulation issued by MOT demonstrates government’s recognition and support of online car-hailing services, a new business model under the “Internet Plus” national strategy. As a key player in this industry, Uber China has established local entities and operations, obtained requisite licenses and qualifications as an Internet company, with servers based in China. We are in close communications with local regulators, and will proactively fit in the new norm of industry development, follow the spirit of the draft regulation, comply with all requirement, and continuously partner with local governments in implementing the new set of rules. Our goal is to continuously provide reliable, affordable, safer and environment-friendly transportation options, enabled by our global leading technology under the new legal framework, as we fulfill our commitment to long-term development in China, contributing to cities, communities and citizens."
Keywords: regulation wireless Ministry of Transportation ridesharing car hire app mobile application
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