Categories: NewsTechnology

Uber Faces Regulatory Trouble In Three Major Chinese Cities

New regulations imposed by the Chinese government do not bode well for Uber and Didi. Both companies are on the verge of losing their drivers and cars as a result. With new restrictions on who can drive which vehicles being proposed, things aren’t looking good for the ride-sharing industry. For now, only three Chinese cities are contemplating these changes, but others may follow suit.

Big Changes Are Coming To Major Chinese Cities

To put this news into perspective, the cities of Shenzhen, Shanghai, and Beijing are looking to impose new municipal ride-hailing regulations. If these proposals are approved, city officials can determine who can drive and which vehicles they are allowed to use. If this were to pass, the number of potential drivers for Didi and Uber would dwindle very quickly. In addition, most of the current “official” drivers could find themselves barred from making money through ride-hailing apps as well.

These proposals require every driver to have a residency registration for the city in which they work. Right now, that is far from the case for most Uber and Didi drivers. Migrant workers, for example, do not possess this documentation.

Keeping in mind how there are over 410,000 active driver accounts in Shanghai alone, those numbers could see a sharp decrease in the coming weeks. An interesting fact is that less than 2.5% of those drivers are actual Shanghai residents. It is expected that similar numbers apply to Shenzhen and Beijing as well. Although the proposals still have to be approved, the idea sets a precedent for other countries around.


Related Post

One downside to supporting these regulations is how cities will become far less efficient as a result. Moreover, the prices for ride-sharing solutions will skyrocket, which will not benefit residents and business people either.  The reason Uber and Didi are able to offer such low pricing to their users is due to the vast availability of drivers in these regions.

More importantly, giving city officials the option to determine which cars can be driven is a big step backwards. If only specific models and brands are allowed, ride-share fares will surge much higher than taxi fares, which will hurt ride-sharing in general. Uber and Didi will do everything they can to oppose these guidelines, but it remains to be seen how successful their efforts will be in the long run.

Image credit 1

If you liked this article, follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin, cryptocurrency, and technology news.

JP Buntinx

JP Buntinx is a FinTech and Bitcoin enthusiast living in Belgium. His passion for finance and technology made him one of the world's leading freelance Bitcoin writers, and he aims to achieve the same level of respect in the FinTech sector.

Published by
JP Buntinx

Recent Posts

The Future of Eyewear is Looking Bright

The global pandemic changed many different aspects of our lives. One thing that has been…

50 mins ago

CRO Price Up 22% Amid’s New LA Arena's CRO is up over 22% today, setting a new all time for the cryptocurrency.…

3 hours ago

Top 5 DeFi Coins to Watch for 2022

The DeFi sector of cryptocurrency is valued at over $168 billion, with over $10 billion…

14 hours ago

AMC CEO Announces Plans to Accept Shiba Inu via Bitpay in the Next 2-3 Months

In a twitter post yesterday, Adam Aron, CEO of AMC Theaters, announced the company's plans…

19 hours ago

Loopring and Gamestop – What Is Up with These Two?

Loopring and Gamestop are two entities that, at first glance, seem very different. One is…

19 hours ago

The Safest Methods to Deposit into Online Gambling Accounts

The rise of online betting is plagued with inevitable setbacks. One of which is the…

19 hours ago

This website uses cookies.