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October 12, 2016 02:00 pm

Uber and Didi Face Regulatory Challenges Throughout China

hackingbear writes: Contrary to the central government's wish to boost employment from peer-to-peer economy, the Chinese cities of Shenzhen, Shanghai, and Beijing, who have invested big interest in traditional taxi services, are all looking to pass municipal regulations on ride-hailing businesses that could wipe out many of Uber and Didi's drivers and cars. "There will be a sharp drop in market supply of rideshare vehicles. In Shanghai, for instance, less than 20 percent of existing rideshare vehicles meet the proposed (wide) wheelbase requirements. There will be significant decrease in the number of rideshare drivers. Of over 410,000 activated driver accounts in Shanghai, only less than 10,000 are residents with Shanghai residency registration," said Didi on its social media outlets. In China, ridesharing drivers are usually migrant workers who have few other choices of employments, and rich urban residents are not interested in such jobs. Given the sore state of the economy in China, high unemployment would mean social unrest; the ridesharing economy may prevail at the end as it has become too big to be strictly regulated. Separately, the Chinese government opened an antitrust probe into Uber's sale of its China operations to Didi in September after the announcement of the merger.

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