Ride-Hailing Came Under Regulation Today. What Will Change? We Compiled the Rules From 58 Cities

Hangzhou was the first to loosen the limits in its implementation rules.

Cities and the companies involved are releasing more information throughout the day, and there is likely to be a lot of it, so all updates are collected at the end of this article.

"As long as Didi hasn't notified me, I can feed my family one more day." That is what Didi Express driver Mr. Wang told QDaily. He had been driving for Didi in Beijing for two months.

What worried him were the Beijing Municipal Ride-Hailing Management Implementation Rules (Draft for Comment), announced to take effect on November 1. Under them, to drive for Didi in Beijing a driver must hold Beijing hukou (household registration), and the car must carry Beijing plates, have a wheelbase of 2.7 meters, and a displacement of 2.0L or 1.8T and above.

Mr. Wang came from Henan to work in Beijing. He has no Beijing hukou and little chance of getting one. And the Citroën C5 he rents from a car-rental company, though it carries Beijing plates, does not meet the displacement rule.

From October 8, when the rules came out, to the morning of November 1, when QDaily went to press, neither Didi nor Beijing's traffic authorities had said how the vehicle restrictions would be handled.

The comment period closed two weeks ago. Drivers do not know when the restrictions will actually keep their cars off the road, or whether anything will be relaxed once the policy is in force.

Most of Didi's five thousand employees have little sense of what the new policy means either, and work goes on as usual. The day before the rules took effect was Halloween, and Didi's headquarters, outside Beijing's northwest Fifth Ring Road, held a pumpkin-carving contest, with designers from different departments gathering to cut pumpkins into shapes. The product team held its usual meetings, including on the businesses that strict enforcement would hurt.

"It's too early for you media people to be asking — nothing is settled yet," a Didi PR manager said, turning down an interview request.

A few hours before November 1 arrived, in a WeChat group of more than seventy Didi drivers used for daily chat, someone asked, "Are you guys still picking up fares tomorrow?" The answer came back: "Just keep picking them up. As long as Didi hasn't told us out-of-town plates are cancelled, we can drive!"

In another group, drivers were asking whether Didi would still reimburse fines if they got caught in an inspection now.

Drivers who don't meet the requirements could still open the Didi app today and take orders, and they got a notice about a 1.6x bonus for today's peak hours.

November 1 began in uncertainty, and the drivers and Didi staff waiting to see how the government would enforce the rules were not only in Beijing.

As of press time, of the 58 cities nationwide that had published draft rules, only Hangzhou and Ningbo had announced a timetable for enforcing them.

We compiled every local rule published so far. If the drafts are enforced to the letter, cheap cars are finished in most of the country

Ride-hailing means every non-taxi vehicle connected to a platform like Didi, Uber or Yidao, and until now its legality was unconfirmed. In the second half of last year, Beijing, Shanghai, Guangzhou, Chengdu and other cities ran sting operations, usually fining drivers 10,000 to 20,000 yuan, with the highest fines reaching 100,000.

The ride-hailing management measures the Ministry of Transport published in late July were read as the government letting go a little: they made ride-hailing legal in China, with restrictions, but none of them tight.

Plenty of drivers who had been afraid of fines joined the platforms after the measures came out.

"Everybody said back then that after National Day the state would announce a policy allowing it," recalled Mr. Guo, a Henan native driving in Beijing. He had sold his Jinbei van in August and switched to a Volkswagen Santana to drive Didi Express.

But the ministry's policy left room for local governments, and the implementation rules announced one after another from October 8 mostly added tight restrictions.

By QDaily's count, as of the early hours of November 1, 58 prefecture-level or higher cities had published ride-hailing rules online. Among the 31 municipalities and provincial capitals, thirteen — Harbin, Taiyuan, Yinchuan, Nanning, Lhasa, Urumqi, Nanchang, Zhengzhou, Haikou, Kunming, Fuzhou, Changchun and Xining — had not.

Sorted by how restrictive they are, 35 of the 58 count as "strict." Among the municipalities and provincial capitals, only four are not.

The restrictions fall into a few groups: the driver's hukou, where the plates come from, and the model of car. Together they limit where drivers come from and what it costs to buy or rent and fuel a ride-hailing car — all of which show up in the price of a ride.

Outside the first-tier cities, plates are not much of a problem, but the model requirement directly sets the entry bar and the running cost. Cities sort models in every imaginable way: by wheelbase, sticker price, displacement, body length. We graded strictness by the model rules.

Strict: meeting any one of these would rule out nearly every Didi Express car, and a fair number of Didi Premier cars too

• List price > 150,000 yuan;
• Wheelbase > 2,700mm;
• Displacement > 1.8L naturally aspirated or 1.6T turbocharged;
• Length > 4.8 meters

Beijing's wheelbase floor of 2,700mm generally means a mid-size or "B-class" car. Jiangmen's 4.8-meter body length would even filter out the BMW 3 Series and the Audi Q3 — cars you normally see only when you call a Premier.

The Express models you actually see on the road — the Ford Escort and Fiesta, the Toyota Corolla, the Peugeot 207 — all sell for around 80,000 to 120,000 yuan.

By this standard, the cars that Didi Express and People's Uber use to sell cheap rides basically cannot be on the road.

Moderate: meeting any one of these would rule out a good share of Didi Express cars, though plenty could still run

• List price > 120,000 yuan;
• Wheelbase > 2,650mm;
• Displacement > 1.6L naturally aspirated or 1.2T turbocharged;
• Length > 4.6 meters

Demanding both a price above 120,000 yuan and a wheelbase over 2,650mm knocks out models China has in huge numbers: the Volkswagen Lavida, the Santana, the Bora.

Owners would still have joint-venture models to pick from — the Toyota Corolla, the Levin, the SAIC MG5, the Roewe 350 — all above 1.6L.

Loose: no restriction goes beyond the following, and most Didi Express and People's Uber cars are unaffected

• Price > 100,000 yuan, or no requirement
• Wheelbase > 2,600mm, or no requirement
• Displacement > 1.4L naturally aspirated, or no requirement
• No length requirement

In the end, of the 58 prefecture-level or higher cities that had published rules, 35 were strict, 13 moderate and 10 loose.

Lanzhou is the odd case: it barely restricts models, plates or drivers, but it caps the whole city at 3,000 registered ride-hailing vehicles and forbids prices below taxi fares, so it counts as strict.

We put the local rules into a table:

Didi has raised prices lately, but it is still cheaper than a taxi. Take Beijing, subsidies aside:

Express: no flag-fall fare, 1.8 yuan per kilometer, a service fee of 0.5 yuan per minute, minimum 10 yuan;

Premier: a flag-fall fare of 12 yuan, 2.9 yuan per kilometer, and a service fee of 0.6 to 1 yuan per minute.

Taxi: a flag-fall fare of 13 yuan, 2.35 yuan per kilometer.

For the same 5-kilometer ride with no traffic, Express costs 11.5 yuan, Premier 38.5, a taxi 17.6.

When demand outruns supply, Didi multiplies the fare. But taxis also charge more at rush hour and at night, and are not cheap either.

In the strict cities the fleet will shrink hard. By Didi's own account, fewer than 10,000 of Shanghai's 410,000 registered drivers hold Shanghai hukou, and once the model rules are added on top, fewer still can drive.

If the rules are enforced as written, hailing a car on your phone will cost at least Premier prices. In Beijing and Shanghai, where drivers must hold local hukou, it will cost more than that, because fewer drivers can work.

How the rules will be enforced is still unclear, and drivers are just as lost

As of the morning of November 1, before this article went up, only Hangzhou and Ningbo had held press conferences to report the results of their comment periods and present the rules taking effect today.

Hangzhou set a four-month transition. From tomorrow, ride-hailing platforms must clean up and regularize the cars they already have and complete the paperwork. The ride-hailing driver exam starts November 15.

Hangzhou also loosened the hukou rule in its draft: no local hukou or residence permit is required, only a temporary residence permit held for 12 months or more. That makes it fairly easy for out-of-town drivers to work in Hangzhou.

Ningbo went the other way and added a rule that was not in its draft: ride-hailing cars may not be more than two years old.

Beyond these two, the cities that published drafts or issued rules outright from October 8 have mostly given no concrete plan for carrying them out.

Both the Ministry of Transport's guiding opinion and the local rules require ride-hailing cars to carry satellite positioning devices that log trips, plus emergency alarms. The companion driver qualification rules require drivers to sit an exam for a "Ride-Hailing Driver Qualification Certificate," and some cities also require vehicles to update their operating records.

But the drivers we interviewed in Beijing, Shanghai and elsewhere had received no notice of any of this, and had not heard where to go to change their operating status or apply for the certificate.

Nearly a month of interviews makes one thing clear: some of what drivers believe about the policy is plainly unrealistic.

One said only cars taking advance bookings count as ride-hailing. "My car meets the ride-hailing standard, but I'm doing this part-time to kill the hours, and I only take real-time orders like yours. That doesn't count as ride-hailing."

Others think the management company they are attached to can simply produce a Beijing hukou for them.

Some believe they can rent an account from someone who has Beijing hukou and register with it.

That badly underrates how much groundwork the government has done.

A week ago the Transport Communications Information Center announced that the ride-hailing regulatory data exchange platform had begun trial operation. The government built and leads the platform, and Didi, Uber, Shenzhou and other companies are connected to it. Through it, regulators can see driver identities and vehicle tracks in real time. Didi says its own connection work is under way.

Enforced strictly, that leaves drivers almost no way to register and operate using someone else's plates or identity.

Still, drivers have few channels for reliable information. Of the nearly 30 we interviewed, every one said he had heard nothing from Didi itself; the sources were "something online," "something on the radio," "something in the group chat," or "a passenger said so."

The day the drafts for Beijing, Shanghai, Guangzhou and Shenzhen first appeared, Didi put out a fast official response warning that they would threaten social stability: "Large numbers of ride-hailing drivers will be hit with unemployment, becoming idle members of society who have to find new work, which could produce a mass crisis and a factor of social instability."

The statement was deleted soon after, and even the few outlets that kept the original text cut at least that passage.

Since then Didi has said little, posting only occasionally on "Didi Listens," its WeChat account for drivers, about new local rules or views aired publicly by experts and scholars.

On local governments' new policies, Didi may no longer be able to say much in public. Its drivers do not necessarily understand that. Some think Didi is trying to drive them out by withholding the high-value orders.

The policy hasn't even arrived, and many drivers have already left

Early in the month, as the local rules were coming out, Didi had just finished its merger with Uber and was cutting driver subsidies step by step. It had also finished separating driver and passenger pricing, so that what a driver sees after finishing an order is what is left once Didi takes its cut.

For drivers who own their cars, the enthusiasm went as the subsidies went.

"I get the feeling fewer people are driving for Didi now. There used to be no double bonus outside the Fifth Ring Road; now they're doubling out there too," said Mr. Wang, who had been driving Didi Express in Beijing for under four months.

He is from Zhangjiakou, Hebei, and his car carries Hebei plates. When subsidies were high he could push himself through a twelve-hour day and make five or six hundred yuan in Beijing, before gas.

Lately he has lost interest. "Once the new policy came out, even if they let you keep doing it you don't want to. There's no money in it. No subsidy now, and all you get are small fares. Now I go out in the morning and head back by seven or eight at night, eight or nine hours, three or four hundred yuan."

Mr. Zhao, who has driven Express in Beijing for a year, came from his hometown of Chengde, Hebei, hoping to earn more. After leaving the military he worked back home as an auxiliary police officer and in forest firefighting, but the pay was 2,000 yuan a month and had not moved in years.

Before coming to Beijing he drove a kindergarten school bus for a few months, quit over friction with colleagues, and started driving Didi Express.

Early this year was his best stretch: up to sixteen or seventeen thousand yuan in a month. Didi gave him no social insurance, unlike the kindergarten, but the money was good enough that he didn't mind.

Before Didi and Uber merged, both sides used generous subsidies to pull in drivers like Mr. Zhao. At the peak, Uber in Beijing guaranteed 7,000 yuan a week to drivers who completed 70 orders.

That kind of money was never going to last.

In April, Mr. Zhao's fellow drivers organized a strike against Didi's subsidy cuts, and he joined. Didi nudged the subsidy up on the day of the strike, and afterwards everything went back to how it was.

Asked what he would do next: "I'm not asking for a huge bonus, but if Didi made the bonus policy steadier I'd think about driving Express as a long-term job." With subsidies moving unpredictably, he isn't sure. "I can only take it a day at a time. Of course I'm not going to throw myself into this job."

"Find something else to do" — that is what most of the drivers we spoke to said they would do.

Mr. Zhang, who bought a Volkswagen Jetta this year and drives Didi Express on Beijing plates, has finished more than 2,000 orders. He is looking for a new job too.

"The week before last I had things to do and barely drove. I took 700 yuan in fares and still landed in the top 20,000. I used to make over 3,000 a week and rank around ten thousand." He means the weekly income ranking Didi publishes for drivers, and that week happened to be when Didi had all but stopped subsidies and the policy changes were announced.

At 700 yuan a week, a driver takes home a little over 500, barely above Beijing's minimum wage of 1,890 yuan a month. Subtract gas and there is nothing left.

That "week before last" was when subsidies were at their lowest and the new policy had just landed. Under the double blow, fewer than 20,000 of the several hundred thousand registered Didi drivers in Beijing were active full-timers that week — a third of the number of Beijing's taxi drivers.

Perhaps to give drivers something to work for, both Didi and Uber restored subsidies in the last two weeks of October.

The new rules hit car-rental companies too

Drivers who can buy a car and get local plates usually have options. Asked what they would do next, they told us: find a company and drive an executive, go back to hauling freight, go back to running a business. With the subsidies gone, they had little reason to keep driving anyway.

Didi saw this coming and has worked with car-rental companies across the country to bring in drivers who cannot afford a car.

Mr. Han, who drives Didi Express in Beijing, is one of them: the BAIC electric car he drives comes from a new-energy rental company, and he pays over 3,000 yuan a month for it.

Businesses renting cars to carless drivers come in three types. One supplies the car, takes a deposit and monthly rent from the driver, and lives off the spread. Depending on the model, rent runs from 3,000 to more than 6,000 yuan a month — much like the "quota fee" a taxi driver pays.

Another supplies both drivers and cars to Didi and Uber and takes a cut of driver income, roughly 2.5% to 3.5%. Drivers pay nothing fixed; the cut comes purely out of fares.

The third works as rent-to-own: the driver pays monthly rent for three years, and the car is then signed over to him.

In a rent-to-own deal the car belongs to the driver when the contract ends. The rental company earns part of its money from the rent spread and part from Didi's commission.

Now the new rules shut out most of the drivers attached to rental companies, and some cities' rules ban rent-to-own outright.

"All we can do is wait." That was the common line from rental-company staff QDaily reached after the local rules started coming out.

Ms. Zhang of Beijing Zhongjian Yitong Technology told QDaily that last year they figured renting cars to carless drivers to run Didi would make money, so they bought more than 100 cars to rent out and take the spread.

Every car Zhongjian Yitong rents out meets only the Express standard, and not one driver who came to rent has Beijing hukou. Even before the policy was formally issued, drivers had begun handing cars back.

"The hukou requirement alone puts us out of business." Even knowing she may not be able to keep going, Ms. Zhang still hoped the policy might change. A minute before hanging up, she asked back: "Do you think this is already set in stone?"

Manager Li at another rental company was gloomier. He told QDaily: "I think the government just wants to control these cars, so the moment the draft came out I knew it was settled."

A year ago Manager Li quit his job to start the company. Early on he worked with Uber, renting out more than 800 cars to recruit carless drivers to sign up, and splitting income with the platform.

June and July were his best months, with about ten new drivers a day. Since the policy, drivers have been returning cars. "These days it's a good day if we sign one new driver."

Your commute has already changed. The question is whether this market can open up further

Governments restricting ride-hailing is not a Chinese peculiarity. Uber has operated in Western Europe for years and is still tightly restricted in most cities. Japan and South Korea still bar non-professional drivers from providing taxi service.

Uber ran into policy trouble at home in North America too. In 2012 it could not get into New York, the biggest market in the US: the city had ruled that private-hire cars could not exceed 1% of the city's taxi fleet.

New York has since changed course. The city released a report finding that Uber and Lyft do not make congestion worse, and it loosened the limits.

Quebec, which drove Uber out in 2012, opened trial operating licenses this year.

These markets opened up because premium ride-hailing cars plus carpooling run far more efficiently than traditional taxis, and the gain for traffic is beyond argument.

China is no different.

The Beijing government responded earlier to the draft ride-hailing measures, noting that "Beijing already has more than 5.6 million vehicles, far beyond what its road resources and environment can carry." The point was to address congestion.

But ride-hailing also persuades people who would otherwise drive to work to call a car instead, taking cars off the road. And carpooling puts more people in each car.

At a recent seminar, the economist Xue Zhaofeng questioned the logic: "From an environmental point of view, the first thing to curb should be cruising taxis, because effective dispatching by ride-hailing platforms certainly cuts the time cars run empty, and necessarily raises the utilization of both cars and roads."

Traffic has been getting more efficient since the days a few years ago when a taxi was your only option. Data from Tsinghua University's Media Survey Lab shows that after taxi drivers started using hailing apps, 41.2% saw their monthly empty-running rate fall by 10-30%.

Once Didi and Uber brought private cars in, the whole system got more efficient: they could pull in part-time drivers to add capacity at peak hours. Then carpooling let a driver carry more passengers on one trip, raising each car's utilization further.

More than one local government has seen what premium ride-hailing cars do for travel efficiency. In June last year the Shanghai government announced it would launch a "Shanghai Taxi Information Service Platform" and build a similar mechanism.

Those efforts have not produced much, but it is not that policymakers fail to understand what efficient travel looks like.

It is that for various reasons — limiting population flows, protecting the taxi trade — the rules now on the books in most places will push the market and the technology backwards.

Policy cannot fully hold back that much efficiency, though.

An alternative to the taxi already exists. And the taxi's own unreasonable operating model may be about to change: at roughly the same time as the Ministry of Transport's ride-hailing measures, the State Council's General Office released guiding opinions on the taxi industry calling for a rethink of the quota fee and the large deposits drivers must put down.

Even if cheap ride-hailing stopped entirely, Didi would only be back where it was in early 2015, before it launched Express. Passengers would pay more, Didi's valuation would take a hit, but hailing a car by phone is not going away.

And hailing a taxi, or a pricier Premier car, from your phone still beats standing on a Beijing street at rush hour for forty or fifty minutes hoping a passing cab will stop for you.

The question from here is whether the market will open up further — and how long that takes.

Updates on local policies:

Hangzhou, evening of October 31: Loosened the hukou rule, from a residence permit to a temporary residence permit held for 12 months or more. Trial period of one year.

Ningbo, evening of October 31: Added an age limit for ride-hailing cars, no more than 2 years. Transition period of 4 months.

Xi'an, afternoon of October 31: Published the Xi'an Implementation Opinions on Deepening Reform to Further Promote the Healthy Development of the City's Taxi Industry (Draft for Comment). Strict: a wheelbase of 2,700mm, length of 4.8 meters, and displacement of 2.0L or 1.8T and above. Comments close November 30.

Nanning, November 2: Nanning published the Nanning Ride-Hailing Business Service Management Implementation Rules (Draft for Comment), setting the ride-hailing car price at 130,000 yuan and above and the wheelbase at 2.7 meters and above,

requiring applicant drivers to hold at least a local residence permit, and capping carpool trips at two a day.

Kunming, November 2: Kunming published the Kunming Municipal People's Government Implementation Opinions on Deepening Reform to Promote the Healthy Development of the Taxi Industry (Draft for Comment), setting the bare-car price at 120,000 yuan and above, the wheelbase at 2.7 meters and above, and requiring applicant drivers to hold at least a local residence permit.

Fuzhou, November 3: Fuzhou published the Fuzhou Ride-Hailing Management Implementation Rules (Draft for Comment), requiring a car price of no less than 150,000 yuan or a wheelbase of 2.7 meters and above, plus local plates. Applicant drivers must hold at least a local residence permit.

Zhengzhou, November 5: Zhengzhou published the Zhengzhou Ride-Hailing Business Service Management Rules (Interim) (Draft for Comment), requiring ride-hailing prices above local taxi fares, a wheelbase of 2.7 meters and above, and local plates. Applicant drivers must hold at least a local residence permit. Comments close November 11.

Zibo, Linyi, Rizhao and Weifang, November 8: Published draft ride-hailing rules for comment. All four require local plates and a local residence permit, and a car price of no less than 120,000 yuan. Zibo, Linyi and Rizhao require a wheelbase of 2.7 meters; Weifang requires 2.65 meters. On displacement, Zibo requires 1.8L or 1.4T and above, Weifang 1.6L or 1.4T and above, while Linyi and Rizhao set no requirement.

Wenzhou, November 8: Wenzhou published the Wenzhou Ride-Hailing Business Service Management Implementation Rules (Trial) (Draft for Comment), requiring a car price of no less than 120,000 yuan, a wheelbase of no less than 2.6 meters, local plates, and that applicant drivers hold at least a Zhejiang provincial residence permit issued in the city. Carpool trips are capped at four a day. Comments close November 14.

Yuncheng, Xinzhou, Jincheng and Changzhi in Shanxi issued draft rules for comment. Of the four, only Jincheng requires neither hukou nor a residence permit; the other three require ride-hailing drivers to hold at least a residence permit. None of the four restricts the vehicle. Yuncheng and Changzhi require prices above taxi fares, while Xinzhou requires a wheelbase of 2.6 meters and above and a price of 100,000 yuan and above.

Xiamen, November 29: Xiamen issued the Xiamen Ride-Hailing Business Service Management Implementation Rules, requiring drivers to hold a valid Xiamen residence permit and cars to be locally registered, with a wheelbase of no less than 2.7 meters and displacement of no less than 1.95L.

Zhuhai, morning of November 30: Zhuhai released the Zhuhai Ride-Hailing Business Service Management Provisional Regulations (Draft for Comment). It does not restrict driver hukou, but requires a wheelbase of no less than 2.7 meters, displacement of no less than 2.0L or 1.6T, and local plates. Comments close December 9.

Dezhou, December 1: Dezhou released the Dezhou Implementation Opinions on Deepening Taxi Industry Reform (Draft for Comment), requiring a wheelbase of 2.6 meters and above, displacement of no less than 1.6L, and local plates. Drivers must hold at least a residence permit.

Fuzhou, December 2: The Fuzhou Municipal Transport Commission formally issued the Fuzhou Ride-Hailing Management Implementation Rules, effective the same day. Compared with the draft, the rules spell out vehicle admission more clearly: a ride-hailing car must meet one of two conditions — a purchase price including purchase tax of 150,000 yuan or more; or a wheelbase of 2,700mm and displacement of 1.8L (or 1.6T) or above together with a purchase price including purchase tax of 120,000 yuan or more.

Statements from the companies involved:

Shenzhou Zhuanche, evening of October 31: Responding to the new policy, it said, "At present all Shenzhou Zhuanche cars carry local plates and are B-class or above, and most are new, so they largely meet the vehicle requirements set by the various regions.

From the day we were founded we have followed the Ministry of Transport's regulatory spirit strictly in offering high-quality, differentiated ride-hailing service. Every one of our cars meets the requirements, and every driver has been carefully screened, thoroughly trained and strictly managed."

Yidao, evening of October 31: Responding to the new policy, it said, "

We have always actively advocated operating in accordance with the law. Yidao is applying for the qualifications the new policy requires and optimizing our existing business on a scientific basis.

"

Didi, morning of November 1: Issued a public statement: "We are actively communicating and reporting to regulators in each region and sorting through the specific comments. Didi will keep talking with authorities at every level, working to meet the public's travel needs as fully as possible."

We reached Manager Li of a Beijing rental company, who said Didi had told them they can still pick up passengers for now, with the specific rules yet to come. He said the message came from a Didi executive personally, so it counts as an internal, individual view. For now his drivers are taking orders as usual.

(Graphics: Wu Lingwei)

Cover image source: Wikimedia Commons, Busy Dhaka Night