While Uber Thumbs Its Nose At The Law, Chinese Rivals Embrace Regulation As Competitive Advantage

While Uber Thumbs Its Nose At The Law, Chinese Rivals Embrace Regulation As Competitive Advantage

Didi Kuaidi, China’s largest car hailing app, will now have to share driver information with a second municipal government in China. The taxi hailing service, just like American rival Uber, has been receiving a lot of backlash from the government and established monopolies .The increased data sharing, while clearly a burden, may actually be a competitive advantage.

By giving the government data, Didi Kuaidi may actually be putting itself squarely on the path of legalization while rival Uber would squarely be on the other side.

Didi Kuaidi announced they would be establishing a taxi driver information service with the municipal government of Zhuhai , Guangdong province. The service, the company said, would better assist the authorities in accessing industry data and services.

Through a joint statement between the company and the municipality, the two said the joint sharing of information would also enhance passenger security and make commuting easier.

The first platform of its kind between Didi Kuaidi and a municipality was launched on June 1st with Shanghai authorities. The system has enabled the two to freely share information about their services and the industry. In doing so, authorities would be able to crack down on illegal cabs that were operating without licenses while ensure Didi Kuaidi drivers remain untouched.

The establishment of the new service with Zhuhai came on the same day the Internet was awash with reports about a woman being robbed, assaulted and raped in the Sichuan capital, Chengdu, by the driver of san Francisco-based Uber.

Analysts, however, have expressed doubt that the new service would enhance the security of passengers hailing cabs using the app as the service will not extend to privately owned cars.

Cab hailing services have been receiving plenty of backlash by the Chinese government and established taxi monopolies, a majority of which are government backed. Furious drivers recently organized a go slow against the services and even attacked cars using the service, blaming them for the destruction of their businesses.

In May, Chinese police raided Uber’s offices in Chengdu and Guangzhou while in Beijing, authorities declared their private car hailing service illegal. Uber drivers were also targeted in a police sting operation in Hong Kong that led to numerous arrests and detentions.

This month, top cab hailing companies Did Kuaidi, Ucar, Yongche and Uber were compelled by the government to restructure how they operated to comply with national regulations.

Cab hailing services are facing increasing backlash in China and European countries like France and Germany. Through their services, traditional taxi monopolies have had their business eaten into while authorities are concerned over the security implications of such services. Heading into the future, more of such collaborations between the services and local governments will be necessary for their continued operations, something Uber may be lower than rivals to appreciate.

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