On June 27, 2016, the Ministry of Transport, the Ministry of Industry and Information Technology and five other ministries and commissions jointly enacted Decree [2016] No. 60 on Interim Administrative Measures for Online Ride-Hailing Services (“the Decree”), which takes effect November 1, 2016.

Previously prohibited, online ride-hailing services will be legally permitted to operate in China, with China becoming the first country in the world to allow this type of business to operate legally.

The highlights:

  1. To lawfully operate, the platform companies, the vehicle owners and the drivers must each apply for the certificates or permits required.
  2. A company intending to carry out ride-hailing services (e.g., Didi or previously Uber) must apply for an Operation Permit for Ride-Hailing from the administration department for taxis at its registration location. To qualify, the company must:
  • have legal person status;
  • have an internet platform and the ability to exchange and process information; also, the network service platform database must be connected to the supervision platform of the taxis’ administration department and its server must be located on the Mainland; and
  • have signed an agreement for payment settlement services with a bank or nonbanking institution to deal with electronic payments.

After receiving the operation permit, other requirements include record filing with the department of communication and telecommunication administration, and with the authorities designated by the public security bureau.

  1. Vehicle owners must apply for a Transport Certificate for Ride-Hailing, directly or through the ride-hailing platform company.
  2. Drivers in the ride-hailing business must apply for a Driver License for Ride-Hailing, directly or through the ride-hailing platform company.
  3. The ride-hailing platform company must sign different labor contracts with drivers, depending on working hours and service frequency. It must set reasonable prices for ride-hailing, display the prices clearly and give passengers taxi receipts. The ride- hailing platform company must not violate pricing law by carrying out unfair pricing practices, and it must purchase liability insurance for passengers.
  4. Personal and business information collected by the ride-hailing platform company must be stored and used on the Mainland and kept for at least two years. Unless otherwise provided in laws and regulations, it must not be transferred overseas.

When the Decree was enacted, Didi and Uber (the two giants in the sector, which have now merged) gave their welcoming statements. They also stated their concern that the interim administrative measures leave a great deal of room for local governments to establish requirements for vehicle owners and drivers, which could eventually affect prices.

Date of issue: July 27, 2016. Effective date: November 1, 2016