Police reportedly raided Uber’s office in the Chinese city of Guangzhou, for letting private drivers operate without the needed qualifications, according to local media reports.
Uber has said its cooperating with the authorities but the police raid could mean it will face more regulatory trouble in China as it tries to expand across the market.
Last Thursday’s raid wasn’t exactly a surprise. Back in January, China’s Ministry of Transport declared that private car owners – or those without taxi licenses – should be banned from using ride-hailing apps.
In spite of the restriction, Uber continues to operate. This is partly because it works with licensed vehicle-rental firms in China, to sidestep the ban and deploy its drivers.
But in addition, the company still offers a People’s Uber service, that lets private car owners connect with customers in need of a ride. Uber declined to comment on whether the service might be shut down.
Whether this service will last will be up to Chinese regulators. The government is expected to come up with clearer rules on the market, which could mean Uber drivers will need certification to continue working, said Mark Natkin, managing director of Beijing-based Marbridge Consulting.
“If Uber did not have this investment from Baidu, I would consider its position more precarious,” Natkin added. “It puts them in a better position from a regulatory standpoint, but it’s not bulletproof.”
The country is also already saturated with local competition. The country’s two largest taxi-hailing apps in China merged earlier this year, and Uber itself still has a smaller presence that’s been focused on English speakers.
IDG News Service
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