Despite claiming that its “people’s Uber” service in China, involving private drivers, is simply a type of car-pooling service; the bubblicious company continues to burn its series ZZ financings on legal briefs around the world. That appears to be a total waste when it comes to China as IBTimes reports [5], police, transport and commercial officials in the southern Chinese city of Guangzhou have raided the local offices of online car service company Uber, amid continuing tension in China over the legality of ride-booking apps using private vehicles, which officials say have disrupted the country’s heavily regulated taxi market.
As IBTimes reports [6],
The Guangzhou Daily newspaper published photographs of officials at Uber’s office in the city, and quoted a statement from the city’s transport commission, which said the three departments were currently pursuing a “special campaign” against unlicensed and illegal businesses.
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As part of this, it said, officials had “inspected a company which is suspected of organizing private cars which are not qualified to provide passenger services, and of not having registered with the commercial authorities.”
The statement said that a number of mobile phones had been “temporarily confiscated” during the raid, and the investigation was continuing. The transport commission added that apps offering ride services were not allowed to employ private cars and drivers -- it said any company offering such vehicles for rent “would be suspected of illegal business activity, and action would be taken.” And it said the Guangzhou police would not relax their “high pressure stance” toward cleaning up “illegal operators who disturb the transport market."
A spokesperson from Uber’s Guangzhou office later told the Southern Metropolis News that the raid was just a routine check by the government. The spokesperson said there had been no impact on its services in Guangzhou, and added that the company had always cooperated actively with the Chinese authorities, and was now “communicating with and seeking clarification from the government departments concerned.”
Uber, based in the U.S., describes itself as an “information service provider” that “collects fees on behalf of car rental services and drivers." It has said that its “people’s Uber” service in China, involving private drivers, is simply a type of car-pooling service. However, the company has faced challenges since entering the Chinese market in 2013. Not only is it competing with established Chinese providers, such as Didi Dache and Yidao Yongche, but Chinese authorities have launched a series of crackdowns on app-based car services.
This is not the first time Uber has faced problems in China...
In December last year, police raided an Uber training session for drivers in the central city of Chongqing. And in recent months drivers in many Chinese cities working via Uber and other web platforms have been stopped by police, fined, and have had their vehicles confiscated. The Guangzhou Daily said that the recent crackdown in the city had uncovered many individual cases of illegal car rentals, and that all drivers caught had had to pay a fine of 30,000 yuan (approximately $4,840).
The incidents are a reminder of the tensions caused in China by the arrival of taxi- and car-booking apps in the country. In recent months, taxi drivers have gone on strike in several Chinese cities, in protest both against the high charges they have to pay to the mainly state-run companies that dominate China’s taxi industry, and also against private drivers, who they say are taking away their livelihood. Customers, on the other hand have complained that many taxi drivers themselves have been using apps to take bookings -- often for more than the standard taxi fare -- thus making it hard for passengers to hail taxis on the street.
The Shanghai government recently restricted the use of apps by taxi drivers during rush hours, in an attempt to tackle this problem.
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While Uber has not been officially banned in China yet... it has here...
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