Industry players lauded a regulation on China's fast-growing taxi-hailing apps industry released Thursday after a modification that reduces government interference.
Local authorities have been required to strengthen the regulation on the issuance of terminals installed in taxis in a bid to prevent their use by unlicensed cabs, according to the regulation issued by the Ministry of Transport.
The regulation also forbids the use of taxi-hailing apps in airports and railway stations, and requires app developers to send customer orders only to empty taxies in a bid to ensure driving safety.
The ministry calls for information sharing among different cab-hailing app developers and the establishment of a unified platform that will integrate all taxi-booking apps and distribute customer orders to terminals installed in taxis.
The proposal for the platform had raised controversy when the ministry published a draft of the regulation on May 26 to solicit public opinion. The draft said app developers that refuse to join the platform will be banned.
"The regulation aimed to prevent cut-throat competition and facilitate a healthy development of the industry, but it also raised concerns that excessive regulation will limit the industry development," Wang Jian, an analyst with Internet consultancy Analysys International, told the Global Times Thursday.
Internet giants Tencent Holdings and Alibaba Group had launched a price war to woo users since 2013, offering subsidies totaling more than 2 billion yuan ($322 million) to taxi drivers and passengers who use their taxi-hailing apps and payments systems.
In the modified regulation released on Thursday, the ministry said "the unified platform will not interfere with taxi-hailing apps' operation and healthy competition," which was not mentioned in the draft, and also deleted "the ban on those who refuse to join the platform."
Li Zhiqiang, an official with the transport ministry, said the establishment of the unified platform aims to make taxi-booking services more traceable and better safeguard passengers' interests, people.com.cn reported on Thursday.
The platform, which belongs to public services, will not charge any fees from app developers, Li said.
Major taxi-hailing app developers lauded the new regulation as being beneficial for the sector.
"The regulation has sent a signal that the government has for the first time determined the legitimate status of taxi-hailing apps, which will create a healthy environment for the industry development," Wang Xin, vice president of Didi Taxi backed by Tencent, said in an e-mail reply sent to the Global Times Thursday.
"It also clarifies the boundary between the government and the market, leaving the cab dispatch function to the market," Wang said.
Kuaidadi, backed by Alibaba Group, also said in an e-mailed statement on Thursday that the new regulation will benefit the whole industry.
"The ministry had solicited opinions from the public and companies, as well as taken into account the development trend of technology and the market when preparing the final version," the statement said.
Didi Taxi and Kuaidadi accounted for more than 98 percent of the domestic taxi-hailing market by the end of May, according to data from IT website sootoo.com.
As details have yet to be released, there are still concerns if the government-led platform will affect the efficiency of taxi-hailing apps.
"Now I mainly use the apps when there's difficulty in getting a cab, after developers stopped offering rebates," Li Rui, a 31-year-old Beijing resident, told the Global Times on Thursday. "So I'm really annoyed by a long wait when I am in a hurry."
With the rapid development of the mobile Internet, Wang from Didi Taxi expressed hopes that the government could strike a balance between innovation and regulation to stimulate the integration of the Internet and traditional industries.
"The Internet's penetration into traditional industries will help them lower costs and improve efficiency," Wang said.