CCTV-NEWS：赵克锋：CAB HAILING SERVICES

相关链接：http://english.cntv.cn/2016/07/29/VIDEpr9bWfkOsgqCSzQqMnYR160729.shtml

What is the impact to the car-hailing industry?
Policy recommendations from the State Council Information Office and a set of provisional rules from the Ministry of Transport set to take effect from November 1 essentially legalise ride hailing apps, removing longtime regulatory uncertainty surrounding the mainland China operations of Uber and its local rival Didi Chuxing.
The winners are clearly Didi and Uber and customers but the losers are arguably traditional taxi companies.
The rules are much less restrictive than the market had anticipated, especially towards the role of private cars. It could set an important example about how the government would tip the balance for new business model in the grey area that would overthrow a traditional industry. It calls for a lot of delicate concerns about fairness and income redistribution as well as needs from the customers.
The rules don’t appear to impose any obvious burdens on such online platforms or drivers that would severely damage the emerging business models already dominated by the large players. But recommendations from the State Council call for gradually phasing out taxi franchising fees that the companies ask the taxi drivers to pay. This could imply that the traditional taxi industries will be transiting towards newer models such as online booking platforms in order to break even. Whether they could compete with existing online giants is an interesting issue especially the new rules now clearly specify more anti-competitve restrictions that prevent predatory pricing, companies will not that easily thwart competition by offering extremely low prices.
Now that the platforms have a more formal identity, the government is in a better position to do more nuanced regulation. The rules do require drivers to have three years’ experience  and more rules are bound to follow towards better safety requirement. With a better legal identity, the platforms could work with insurance companies to offer more tailored made insurance plans soon.