China said to legalise Uber, Didi ride-hailing as battle rages

[HONG KONG] China plans to legalise car-hailing services from November, dispelling any regulatory uncertainty surrounding Uber Technologies Inc and Didi Chuxing as they vie for supremacy in the world's largest ride-hailing market, according to prepared remarks expected to be delivered on Thursday.

The country's transport ministry is scheduled to declare that online car-booking services can operate lawfully, according to the prepared comments seen by Bloomberg News.

That would put an official stamp of approval on the ride-sharing services that already cover hundreds of cities and ferry millions of people daily. The government will now encourage private auto-sharing - including car-pooling - but require vehicles to install safety features such as security alarms and GPS.

All drivers must register with local taxi regulators and cannot have criminal records, according to the document.

The document was dated Thursday, although certain conditions could have been updated or modified before the scheduled afternoon announcement.

The new regulations appear less onerous than some in the industry had feared. The transport ministry's first draft of the rules - submitted for public feedback late last year - suggested that only commercially registered vehicles and qualified drivers would be allowed to provide transport through ride-hailing apps, people familiar with the plan had said.

The ministry also proposed giving local governments the authority to decide on the number of licenses, and would have required local offices in individual cities.

Those conditions would have curtailed the pace of expansion for Uber and Didi, which are currently waging a pitched battle for dominance of the burgeoning market.

Both are raising cash at a frenetic pace and spending billions of dollars to bankroll their expansion, a margin-eroding war that some investors are said to oppose.

China's new regulations clear the way for both parties, as well as smaller players such as Yidao Yongche, to compete freely for drivers and riders nationwide.

BLOOMBERG