Local regulations may restrict the growth of ride-hailing services

AFTER ISSUING A REGULATION IN JULY which in principle confirmed the legality of ride-hailing service apps, the Ministry of Transport issued two other documents on Sept 9 that grant local governments the power to decide the total number and prices of ride-hailing services. But if local governments have too much power, they could intervene in the ride-hailing app market and thus curb its development, says an editorial in Southern Metropolis Daily:

The ministry's regulation made headlines and got nationwide applause in July because ride-hailing services, which had been operating for a few years, had been recognized as "legal" by the central government.

Only a few experts warned that the regulation granted local governments too much power that they could use to impose tight limits on the ride-hailing service providers. With several cities publishing their detailed local regulations, that warning is becoming a reality.