Cab-hailing services face tighter regulation

The Hangzhou government has unveiled proposals to place tighter controls over cab-hailing services, or zhuanche, amid a nationwide effort to bring some order to this popular facet of the "sharing economy."

The new rules are expected to come into effect on November 1, after a seven-day period for public comment.

The regulations stipulate that cab-hailing drivers must either have a Hangzhou permanent residency permit or have held a temporary residency permit for at least six months. In addition, they must show proof that they have been licensed drivers for at least three years.

Unlike Beijing and Shanghai, which allow only local drivers to offer cab-hailing services, Hangzhou has left the door open to out-of-town residents.

"Four-fifths of Hangzhou cabbies come from Henan, Anhui and Heilongjiang provinces," said Zhang Xiaodong, vice director of the Hangzhou Transport Bureau. "If we restrict cab-hailing to permanent residents, drivers would be in short supply."

The new regulations will also introduce stricter monitoring of the driving records of cabbies. Any driver with a previous conviction, a history of drug-taking, a record of drunk-driving or evidence of mental illness will be barred from the industry.

This year, a series of crimes related to hailed cabs have stirred public concern. In early March, a cabbie hailed by mobile app was arrested after he attempted to rape a passenger he picked up in Hangzhou's Xiaoshan District. In May, a 24-year-old woman in the southern city of Shenzhen was killed in a car she hired via a ride-hailing app.

The government is now requiring all cabbies to equip their cars with GPS and emergency alarm devices.

Currently, anyone in Hangzhou can offer cab-hailing services by simply registering on a mobile application platform. The new rules will limit services to cars five years or newer, with aggregate mileage of no more than 600,000 kilometers.

In addition, approved cars must have a wheelbase of at least 2.7 meters. That stipulation, which involves five-seater cars, is designed to assure comfort for passengers. Cars with shorter wheelbases will be allowed if they have a sales value of 120,000 yuan (US$17,837) or more.

"The length is based on the standard 2.65-meter wheelbase cab," said Lu Xiande, another vice director at the transport bureau. "Most of the present-day cab-hailing drivers cannot meet that standard, so we have added the minimum price to lower the threshold."

Some drivers aren't happy with the new regulations.

"The government is discriminating against low-priced vehicles," said Yang Wen, who owns a small Chery model car. "That's unfair. Previously, I could earn some money to supplement my family's income. Now, the new rules will shut me out of cab hailing."

Smaller, low-priced cars aren't the only vehicles that will be taken out of service. Cars without a local license plate will also be banned from use in cab-hailing.

"Hangzhou traffic is already very congested," said Zhang. "If we open the door to out-of-town licenses, we will be swarming with more cars."

In recent years, simmering disputes between traditional cabbies and their ride-hailing competitors have boiled over several times, sometimes resulting in physical altercations.

Fares of cab-hailing services are often cheaper, and budding camaraderie between certain drivers and frequent passengers sometimes results in fare discounts that dissuade people from taking traditional taxis.

The new rules ban cab-hailing drivers from cruising specific areas near standard taxi stands or picking passengers up at random from curbsides.

"Traditional cabs still have a role to play in city transport, so it is necessary for government to protect them," said Lu.

A year ago, the Hangzhou government agreed to abolish the operating license fee for mainstream cabbies, which increased their average income by 400 yuan to 1,000 yuan a month.

To balance traditional-cab and taxi-hailing markets, the new rules also require cab-hailing drivers to provide receipts to passengers.

Cab-hailing companies are required to establish a branch in Hangzhou and input their data into the government inspection system. If a cab that shows up to pick up a passenger is different from the one pictured on the app, the company is subject to a minimum fine of 5,000 yuan.