China has proposed strict limits on car hailing

China’s government has proposed strict new limits on car hailing apps’ use of migrants as drivers in major cities, in a blow to Didi Chuxing and potentially to other Chinese internet groups . Migrants from rural China have fuelled the business models of some of the country’s largest internet companies including Alibaba, Meituan-Dianping, as well as Didi Chuxing. They all rely on low-paid drivers and couriers to provide services such as ecommerce, ride hailing and food delivery. Thanks to the proliferation of cheap “online-to-offline” offerings, Chinese smartphone users can order virtually any service delivered to their door, from taxis to takeout food, and this has helped drive rapid adoption of the mobile internet in China. But that practice has clashed with the central government’s recent efforts to limit urban migration. A new set of draft laws rolled out in China’s top-tier cities would require all drivers for car-hailing services to have a residency permit — known as a “hukou” — in the city where they drive (se also “Chinese government has legalised car-hailing“).


Charles Clover and Sherry Fei Ju