China Has Licensed 112 Firms to Run Online Taxis, MOT Says
Dou Shicong
/SOURCE : yicai
China Has Licensed 112 Firms to Run Online Taxis, MOT Says

(Yicai Global) Feb. 28 -- China has now licensed 112 companies to offer online car-hailing services, including various internet companies, traditional taxi firms, car rental agencies and carmakers. 

Individual internet ride-hailing medallions now number around 680,000, while 450,000 road transport permits have been issued, the Ministry of Transport (MOT) announced today.

Among the 112 companies licensed thus far, 27 platforms have already started operating. Ride-sharing leader Didi Chuxing has obtained licenses to ply the streets of 122 Chinese cities, but actually runs in 316. The MOT will continue to guide local authorities to regulate the online ride-hailing sector, agency Vice Minister Liu Xiaoming said at a press briefing today.

Addressing the grievous safety incidents that occurred repeatedly in the ride-sharing sector last year, Liu said that the agency has deployed investigation teams to inspect eight online car-hailing service providers -- including Didi Chuxing, whose drivers committed two murder-rapes of women riders -- since September. All these companies have instituted comprehensive rectification plans and made them public.

On Didi Chuxing's recent announcement of large-scale layoffs, Liu remarked that some enterprises have strayed into financial predicaments because they offered passengers excessive subsidies to woo custom. The MOT pays close attention to these situations and requires firms to protect the interests of passengers and drivers alike.

Didi Chuxing announced the culling of about 2,000 employees with overlapping positions or those under-performing -- 15 percent of its total staff -- on Feb. 15. 

The company is expected to incur a CNY11 billion (USD1.63 billion) last year, mainly from its payment of excessive driver perks and the high costs of bringing itself back into legal compliance following the homicides.

Editor: Ben Armour

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Keywords: Didi Chuxing , Ministry of Transport