Last updated: 11:45 AM ET, Fri July 29 2016

China Legalizes Ridesharing, Legitimizes World’s Biggest Market

Car Rental & Rail | Michael Schottey | July 29, 2016

China Legalizes Ridesharing, Legitimizes World’s Biggest Market

 Photo via Uber on Facebook 

China was already the largest market in ride sharing, now operators can cash in legally.

The Chinese government issued a cabinet document setting forth guidelines for online ride-sharing services like Uber and large Chinese competitor Didi Chuxing. The regulation was hailed by the ride-sharing company and comes on the heels of animosity on the part of the Chinese government toward the companies operating there illegally.

This is the same government that had previously outlawed the companies from using drivers without taxi licenses, but ride-sharing still continued through various loopholes. Just over a year ago, Chinese authorities raided Uber’s offices in various cities throughout China leaving many questioning where and how the companies could continue to operate.

The new guidelines cover rules about registration, fares, employment of drivers and method of payments. It also includes the ability for local municipalities to set their own local restrictions on the services but—perhaps more importantly—encourages those municipalities to support the industry.

READ MORE: Certify Survey Shows Major Growth For Uber, Lyft In Business Travel

In that way, China may become an even more fertile market for ride-sharing companies than the United States in which companies like Uber are still fighting for legitimacy in many big cities.

Uber is planning a massive expansion in China while Lyft—America’s second-largest ride-sharing company—is international partners with Didi. The Chinese company recently raised $7.3 billion ($1 billion from Apple) and owns almost seven times the market share of Uber in China.

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