China Bans Uber

China is banning private cars from offering cab services via apps, according to Bloomberg.

This would mean services like Uber would be banned from the country.

In a statement to the Financial Times Wednesday, the director of Beijing’s traffic enforcement unit Liang Jiangwei said “the use of unlicensed taxis by internet hailing apps violated a ban on illegal taxis.”

A crackdown on car-hailing apps began on Jan. 1, he said, and drivers can face fines up to $3,221.

“Some of these vehicles are ‘taxi clones,'” Jiangwei said. “Many passengers have filed complaints.”

The crackdown was apparently set in motion thanks to lobbying efforts from some of China’s biggest and most established licensed taxi companies. Their prices are capped at below-market rates by China, the FT reports.

This would  be the first time that China has publicly considered private cars operating via apps “an act of illegal operation.” However, some services offer taxi-hailing apps that work with licensed taxis: those apps won’t be affected.

“Our services are based on cooperation with legitimate car-rental companies and labor service companies,” said Kuaidi Dache, which operates an app that works exclusively with those licensed cabs. “[Our private car operator] Kuaidi One is oriented towards the upper-end market, and complements the regular taxi services.”

Uber, meanwhile, is facing many legal challenges in cities around the world, as taxi companies and regulators struggle to deal with the cheap, premium car service. Uber recently launched “People’s Uber,” which was designed to compete with regular taxis in Beijing, at least from a price perspective.

Uber says the company plans on issuing a statement on the matter.

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