On October 10, 2015, the Ministry of Transportation prepared the Interim Administrative Measures for Online Taxi Services (Solicitation for Opinions) to regulate the development of online taxi services, promote innovation and evolution of this industry so that it can better serve the people’s travel needs. The Interim Administrative Measures for Online Taxi Services, which will go into effect on November 1, 2016, were adopted during the 15th Administrative Meeting of the Ministry of Transportation and approved by the Ministry of Industry and Information Technology, the Ministry of Public Security, the Ministry of Commerce, the State Administration of Industry and Commerce, the General Administration of Quality Supervision, Inspection and Quarantine, and the Office of the Central Leading Group for Cyberspace Affairs. This article will briefly introduce the major provisions of the Interim Measures as follows:
First, the adoption of the Interim Measures provides a legal channel for passenger services via private vehicles, which was previously strictly prohibited. To wit, private vehicles that meet certain requisites and complete certain procedures may be lawfully used to provide online taxi services. The conditions stipulated in the Measures are: (1) passenger cars with up to seven seats; (2) must have installed a GPS device with logging enabled and an emergency police notification device; and (3) the vehicle meets the relevant standards and requirements for safe operation. The specific standards and requirements will be later confirmed by the relevant administrative agencies overseeing taxi services in accordance with the actual local circumstances and with an eye toward providing high quality service and development of varied business models.
The Interim Measures define a platform that provides online taxi services as an online taxi service operator, thus it must obtain a permit for “online taxi services”, complete and submit its Internet information service recordation application to the local provincial communications authority where the enterprise is registered, set up its relevant servers in China, and connect the platform database to the supervisory platform of the administrative agency for taxi services before commencement of business.
The Interim Measures have different rules for private vehicle drivers than those for taxi drivers, as taxi drivers are required to pass an examination administered by relevant road transportation agencies on basic knowledge of the relevant passenger transportation laws and regulations, motor vehicle repair, and first aid to passengers. Under the Interim Measures, online taxi service drivers should have the following qualifications: (1) a driver’s license for the model of the motor vehicle they are permitted to drive with at least three years of driving experience; (2) no prior history of traffic accidents or criminal offenses, no criminal records for dangerous driving, no drug abuse records and no drunk driving records and has not accumulated 12 demerits over the last three successive evaluation cycles; (3) no prior record of violent crime; and (4) any other conditions imposed by the municipal people’s government.
In addition, the Measures contain a series of provisions concerning how the online taxi service shall be run. For example, an online taxi service platform company should ensure that the vehicles provided are compliant with the law, the drivers are qualified to operate such vehicles, the pricing scheme is disclosed and meets the relevant national requirements, and there should be a service evaluation system and passenger complaint handling system. Also, the service prices should be clearly indicated and receipts should be provided to passengers. The platform may not impede fair market competition, exclude competitors, monopolize the market or interrupt the normal market order through predatory pricing. The platform shall also pay taxes owed and obtain relevant insurance such as carrier’s liability insurance for passengers. The platform’s collection of personal information from drivers, the persons placing the service orders and passengers should not go beyond what is required for providing taxi services.
On top of that, the Measures also contain provisions concerning the respective duties of the administrative agency for taxi services, the communications authorities and the public security network and information agencies. Meanwhile, self-regulation of this industry will be enhanced and better service provided by setting up a system for recording a driver’s reliability and blacklisted drivers.
Finally, to address those that did not obtain the aforementioned qualifications, operate their businesses illegally and engage in the unauthorized disclosure of personal information, the Measures set out legal liabilities that will be uniformly applied throughout the entire nation.
After several rounds of back-and-forth discussions in the past two years, the amended Interim Administrative Measures for Online Taxi Services now contain more comprehensive provisions concerning the commercial use of vehicles that has become increasingly controversial and clearly establish a path for running online taxi services legally, which serves to promote the healthy development of online taxi service regulations and provide solutions to urban issues such as “difficulties in getting around” and “difficulties in hiring cars.” One more note to be made here is why the Measures are marked “interim”, and it is because agencies such as the Ministry of Transportation was aware of the fact that many countries and cities in the world has banned online taxi services. Moreover, there are still many issues to work through, such as the status of online taxi services, labor relations and price administration. According to the relevant authorities, further follow-up studies will be conducted in the course of subsequent implementations in improving the Measures so that they will better meet the actual requirements of this country.