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Taxi apps try to fend off bans

By Chen Dujuan (Global Times)

10:07, May 28, 2013

Taxi e-hailing app developers said Monday they will work closely with local transport authorities to improve their services, as several cities have either recently barred the use of such apps by taxi drivers or plan to prohibit charging premiums to users.

"Orders with premiums account for only 20 percent of our total orders, so cancellation of premiums would not have a big influence on our business," Zhao Dong, CEO of Hangzhou-based Kuaizhi Technology Co, developer of taxi app Kuaidi Taxi Booking, told the Global Times Monday.

The company will offer full cooperation if the government issues regulation measures, Zhao said.

"We suspended service in Shenzhen on May 20 following the government requirement, and we are now in talks with the local transport authority to seek a solution," Zhuo Ran, marketing director of Didi Taxi, a Beijing-based e-hailing app developer, told the Global Times Monday.

Last week, Shenzhen reportedly halted the use of all e-­hailing apps by asking taxi drivers to uninstall such software.

The Transport Commission of Shenzhen said the halt is aimed at supervision and regulation, as many taxi apps have a bidding function which is hard to regulate. The city is speeding up research on qualifications and regulations for third-party app developers, Wen Wei Po reported Thursday.

Other cities such as Beijing, Shanghai and Wuhan have said it is illegal to charge premiums for passengers who use the app to take taxis.

Sun Jianping, head of the Shanghai Municipal Transport and Port Authority, said Sunday that hailing taxis with premiums is not acceptable to the authorities and taxi drivers who charge premiums by using taxi apps will be severely penalized.

He expressed a number of concerns about the emerging software, such as distracted drivers and disorderly bidding by passengers, which goes against the market order.

Li Xiaosong, a spokesperson for the Beijing Municipal Commission of Transport, told the Beijing Times Friday that premiums are not fair to passengers and the government needs to set rules to ensure equitable services.

Beijing will launch a platform for taxi booking services Saturday covering 66,000 taxis, and will ask drivers not to charge premiums to customers, Li said.

Except Shenzhen, no cities have yet prohibited e-hailing apps, and Didi Taxi has already reached an agreement with Beijing's city dispatch center and will be included the Beijing platform for taxi booking services, Zhuo said, noting that the company will provide services in accordance with different situations in various cities in the future.

The taxi app sector needs government regulation, but the services provided by app developers, including their pricing systems, are not administrated by the government at present, so it is not surprising that transport authorities are taking steps to bring the sector back under government supervision, said Yan Xiaojia, an industry analyst at Analysys International.

"Regulation doesn't mean the e-hailing firms will be shut down, but local governments will create strict admission requirements," Yan said.

Yan also said the future may see app developers forming an alliance with taxi firms to cover auto navigation, dispatch, monitoring and supervision.

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