The sharing economy has become more important in the daily lives of consumers all over the world. While established services such as Uber and Lyft are trying to break ground overseas, there is some stiff competition arising in China. Didi Kuaidi, the main competitor for Uber in China, received the country’s first official operating license for an internet-based private driver service.
Make sure to read: Bitcoin Boosts Number of Non-Cash Payments In Asia
China Issues First License to Uber Competitor
One of the main concerns for Uber is whether or not the countries where this service is in operation plan to force the company to comply with certain regulatory and legislative requirements. In a country such as China, where the government wants to regulate things as much as possible, that process could prove to be quite costly and tedious.
That being said, Uber still plans to expand their services to China, and they have even set up a Shanghai-based subsidiary to speed up the process. Whether or not this has anything to do with regulatory approval, remains unknown at this time. But one thing is for sure, Uber isn’t afraid of the competition, even though Didi Kuaidi should not be underestimated.
China issued the country’s first “Internet Car-Booking License” to Didi Kuaidi, which ends the period during which this internet-based private car driver service operated in a gray area of the law. After applying for this license back in May of 2015, it has taken nearly six months to receive regulatory approval and the required license.
As you would come to expect, such a license doesn’t come without its perks and drawbacks. Granted, Didi Kuaidi is operating legally in China, but they are also required to do in-house screening and training of any and all potential drivers. Furthermore, all of the private cars registered on the platform have to be verifiably certified and licensed by the government of Shanghai.
Last but not last, each and every vehicle registered under the Didi Kuaidi platform has to be insurance covered for up to US$945,000. Depending on the amount of cars Uber might hope to see drive around in China – or Shanghai to begin with – those costs could amount to quite a hefty sum of money.
But that is not all, as standard Chinese technology restrictions will still apply. All of the servers used by Didi Kuaidi – to store customer data and whatnot – need to be licensed and based in mainland China. Furthermore, Chinese censorship and data protection laws will be enforced upon all of the information stored on these servers. This should not be as much as a problem for Chinese companies, but foreign firms like Uber might take exception to these rules.
Didi Kuaidi has no objections to these regulations at all and took the opportunity to announce some additional features now that the company is operating legally in Shanghai. Providing a reliable flow of drivers to areas of the city where existing taxi networks can not get to [easily] will prove to be very beneficial to the company.
Shanghai is only the first step along the way for a company like Didi Kuaidi, as one of their spokespersons hinted at “ongoing talks with city governments and transportation authorities across China.” Depending on whether or not China’s other cities follow the example of Shanghai – or decide to draw up their own regulatory requirements – this expansion will go smooth, or prove to be a race with many hurdles.
Integrating Bitcoin Payments The Next Logical Step?
One of the main points of focus for private car companies around the world is how they accept payments. Traditional payments, such as bank accounts, credit cards, or even paper money, are not all that secure or reliable. But there are viable alternatives in existence, such as Bitcoin, a digital currency that has gotten a lot of interest from Chinese investors over the years.
Bitcoin lends itself to these peer-to-peer types of business in the sharing economy. Private car rides are a form of one peer helping another peer to reach a goal, in exchange for a monetary gain. It only makes sense to integrate true peer-to-peer payments for this purpose, and Bitcoin lends itself perfectly for that purpose.
Source: Tech In Asia
Images courtesy of Didi Kuaidi, Uber, Shutterstock