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China grants legal status to on-demand mobility services

Xinhua, July 28, 2016 Adjust font size:

China unveiled its first nationwide regulation on on-demand mobility (ODM) services Thursday, granting legal status to the industry.

A document released by the State Council, China's cabinet, featured guidelines on the registration and operation of ODM companies.

Previously, firms like China's Didi Chuxing and its U.S. counterpart Uber had operated in a gray area in China, as there is a law against drivers of private cars carrying passengers for profit.

The latest document specifies that ODM firms do not need to have their own fleet, effectively allowing private cars.

Vehicles and drivers providing online-ODM services can apply for a license collectively.

ODM companies will be responsible for the qualification of its cars and drivers, the document said.

A provisional rule released by the Ministry of Transport on the same day set out detailed requirements for ODM companies and drivers.

Cars are no longer allowed to offer rides after they clock-up 600,000 km or have been in use for eight years, while drivers must have no criminal record related to drugs, driving, alcohol or violence, according to the rule.

Didi Chuxing and Uber's popularity has been a source of ire among taxi drivers who must pay high franchise fees.

About 96.6 million Chinese, or about one in every 14, hailed a taxi via online ODM services in 2015, while 21.6 million people booked private cars online, according to China Internet Network Information Center. Endi