The online ride-hailing industry is relaxing its entry requirements. Since the beginning of this year, Jingmen, Nanjing, Nanchang and other places have successively implemented new online taxi booking service management regulations, making adjustments in terms of market access and the upper age limit of employees. Some cities have also made changes to the pricing mechanism, and the industry is further liberalizing.
Relax the entry threshold for drivers
China Business News found that the entry threshold for online ride-hailing drivers has changed mainly in terms of age and household registration. For example, the "Huangshan City Online Reservation Taxi Operation Service Management Implementation Rules" that will be officially implemented on May 1 will adjust the upper limit of driver employment age from 60 to 63 years old. This adjustment is in line with the requirements of the policy of progressively delaying the statutory retirement age. In addition, for online car-hailing car registrations, the above-mentioned rules have deleted the “registration in this city” requirement.
In addition to Huangshan City, Jingmen City’s "Jingmen City Online Reservation Taxi Operation Service Management Measures" officially implemented on March 27 also adjusted the age of drivers. The requirements for men under 60 years old and women under 55 years old were modified to "have not reached the legal retirement age and are in good health." For vehicles with foreign license plates, Jingmen City’s management measures have deleted the geographical restriction that “vehicles must be registered in this city”, breaking the entry barrier for foreign vehicles.
The "Nanjing Online Taxi Reservation Management Measures" that came into effect on February 14 deleted the condition of "having a household registration or residence permit in this city" in the old version. In the future, drivers who have not reached the legal retirement age, meet physical health requirements, have more than three years of driving experience, and have no relevant criminal or serious illegal records can apply to engage in online ride-hailing services in Nanjing.
The "Nanchang City Online Reservation Taxi Operation Service Management Implementation Rules (Revised)" officially implemented on January 20 canceled the "city household registration or residence permit" restriction for online taxi drivers.
Regarding the changes in driver access thresholds, an industry insider told China Business News that behind the relaxation of restrictions on driver employment, in terms of transportation capacity, a large number of cities have promulgated online car-hailing management measures and gradually standardized industry development and accessed platform operation data. You can understand the overall order situation, driver income, and whether transportation capacity is saturated in the city where you are located. Based on the understanding of the above background information, the competent authorities can implement certain total control on the scale of urban online ride-hailing drivers. Relaxing age and household registration restrictions can attract more experienced drivers to join and fill the capacity gaps in these periods and regions.
Chen Liteng, a senior analyst at the Internet Economics' e-commerce research center, told China Business News that the recent relaxation of various access restrictions in the online ride-hailing industry is an important adjustment in the industry's governance thinking. Loosening the household registration and age thresholds for drivers not only resolves the problem of uneven distribution of regional transportation capacity, but also provides flexible employment options for unemployed and job-changing groups, and also plays a role in ensuring people's livelihood.
Many requirements are being improved
In addition to driver access standards, some cities have also relaxed platform operation standards.
For non-local platform companies, the "Jingmen City Online Reservation Taxi Operation Service Management Measures" deletes the restrictive requirements for establishing local branches and only retains the core access condition of "having corporate legal person qualifications" to ensure fair competition among all types of entities. The "Nanchang City Online Reservation Taxi Operation Service Management Implementation Rules (Revised)" deletes restrictive terms such as "branch business license" in enterprise access. Regarding this adjustment, the Jiangxi Provincial Comprehensive Transportation Development Center stated that it is to break down market barriers, not only promote employment equity, but also help build a unified national market.
The above-mentioned industry insiders said that the adjustment may be based on reasons such as improving tourism services, convenience for citizens, or attracting jobs. The revision of the policy has lowered the threshold for foreign companies to enter the local market, and can attract more high-quality platform companies to participate in the local online car-hailing market, which is conducive to the healthy development of the local online car-hailing market.
The changes don’t stop there. In addition to the relaxation of entry thresholds, newly implemented management measures in various places also set requirements in terms of market price adjustment and online ride-hailing compliance.
In terms of price adjustment, Jingmen City’s latest management measures have deleted the statement that “government-guided prices can be implemented when necessary” and require platform companies to set reasonable prices based on operating costs, market supply and demand and other factors, and strictly implement clear price regulations to protect passengers’ right to know.
Chen Liteng said that implementing market-adjusted prices and deleting relevant control provisions can reduce administrative intervention and allow travel freight prices to be adjusted independently according to market supply and demand. Various platforms can flexibly formulate price strategies based on operating costs and service levels, and carry out healthy competition under unified and fair rules. At the same time, it will eliminate differences in freight rate control across regions, help the platform balance its cross-regional layout, and optimize the market-based competition ecosystem in the travel industry.
In addition, various localities are improving driver compliance and service management in detail. For example, Nanjing City officially launched the application of "compliance code" for online car-hailing on January 9, realizing "one code for each car" for compliant vehicles. Each compliant online ride-hailing vehicle must post a dedicated compliance code at a designated location in the vehicle and accept passenger supervision and inspection.
The above-mentioned industry insiders said that it has been nearly 10 years since the Ministry of Transport legislated the online ride-hailing industry, and the industry has entered a mature stage. Although there are still some problems, the competent authorities have more mature experience in how to govern it. It is expected that in the future, more cities will more actively embrace the market-oriented development of the online ride-hailing industry due to changes in the current economic environment and changes in user habits.
Chen Liteng believes that the online ride-hailing industry as a whole is heading towards a stage of wide access and strict supervision. While liberalizing industry access and activating market vitality, it still adheres to the bottom line of vehicle compliance and safety audits.