Two major Chinese cities Beijing and Shanghai have released draft rules on car-hailing services to solicit public opinion. [Photo: Chinanews.com]

Beijing and Shanghai authorities on Saturday announced new draft rules to regulate the online ride-hailing sector, a move that drew mixed reaction from drivers and the industry.

The draft rules, which are open to public feedback, highlight critical qualifications for drivers and their cars such as the possession of local household registrations (hukou) and local plate numbers. These conditions must be met for participation in ride-hailing platforms.

Drivers should also fulfill other requirements, such as the amount of driving experience, age restrictions and minimal traffic violations, according to statements issued separately by the two municipal transport authorities.

Specific regulations about vehicles' gas displacement and wheelbase were also unveiled, according to the statements. For example, petrol-based cars in Shanghai should have a wheelbase of more than 2,700 millimeters.

The regulations will close the door to non-local drivers and raise the entry threshold for service vehicles, Liu Dingding, an independent industry analyst, told the Global Times on Saturday.

"This is a boon for passengers," said a Beijing-based white-collar worker surnamed Huang. She complained that unqualified drivers had dragged down the industry's overall service quality and caused market chaos.

"Non-local drivers are not familiar with local traffic conditions. They usually waste a lot of time finding the right way through online navigation services, and sometimes I have difficulty understanding their accents," Huang told the Global Times on Saturday.

The new policy was welcomed by taxi service providers such as Dazhong Chuxing, domestic news portal sina.com.cn reported on Saturday. The company said the regulations will boost the sound development of the taxi industry and ensure the rights and safety of drivers and passengers.

However, other market players, including leading online car-booking giants, have taken a reserved attitude.

The new regulations will result in a sharp decline of available cars and drivers for online services, according to a statement Didi and Uber jointly sent to the Global Times on Saturday.

UCAR also said the policy is "too strict," although it will have little impact on the company's operations, said another report from sina.com.cn on Saturday.

The number of vehicles registered with Didi that meet the new rules only account for less than 20 percent of the total, Didi said. Drivers who have a Shanghai residency permit only amount to 10,000 out of the current 410,000 Shanghai-based drivers.

The reduction in supply will inevitably "push up fares in the near future," Liu said, noting that this will be a blow to China's booming sharing economy.