The Interim Measures for the Administration of Online Car Hailing Operations and Services
("Hailing Measures") and the Administrative Provisions on Cruising Taxi Operations
and Services
(“Cruising Provisions”) will both take effect from 1 November 2016.

According to the Cruising Provisions, traditional taxis refer to those vehicles that have apparent taxi appearance, and cruise around roads or wait at train stations and airports to pick up passengers. While online booking services are also available for many cruising taxis, such online booking operations and services are still governed by the Cruising Provisions, not the Hailing Measures.

The Hailing Measures only apply to the newly-developed online car hailing operations and services provided by non-cruising taxis. It regulates the activities of building service platforms based on internet technologies, integrating supply and demand information, and using non-cruising taxis to provide services.

According to the Hailing Measures, an operator of online car hailing services must satisfy a series of qualification requirements and obtain a licence to operate online car hailing services (《网络预约出租汽车经营许可证》). The licensed operator is required to provide services only using qualified drivers and vehicles. In addition, the Hailing Measures specify the norms and standards of online car hailing operations and services, and the measures to be taken to safeguard passengers. It also specifies the supervision and inspection powers of the government as well as the legal liability limits of operators, including specified amounts
of fines.

Notably, Article 40 of the Hailing Measures provides that "All regions can formulate detailed implementation rules in accordance with the Measures." Following this, cities including Beijing, Shanghai and Shenzhen, have published their draft regulations, in which specific requirements such as the qualifications of drivers and the standards required for vehicles are specified. For example, in both Beijing and Shanghai, it is required that a driver must be a holder of a local residency permit.

Current FDI policies allow foreign investment within the field of online car hailing services, and with the formulation of detailed implementation rules in the future, interested foreign investors may see more opportunities in this area.

Co-contributor Laura Mackennon (Trainee)