Guangzhou plans on introducing its own government-backed taxi-hailing service that will rival the popular apps Uber and Didi, local newspaper Nanfang Daily reported, just days after authorities raided Guangzhou- and Chengdu-based Uber offices.
According to the China News Service:
Work to develop the Ruyue (by appointment in English) app, which is supported by the city’s Traffic Committee, began in January and internal trials in February.
After participating in tests, taxi driver Chen Ming said the app has three main function options: immediate use, reservations, and a pick-up service. Ideally, the app would help users find a taxi within eight minutes.
A total of 2950 taxis, mostly from state-owned companies, have registered with the system, allowing users to book a ride via telephone, Internet or through the app itself, once it begins operation.
Ruyue’s prices will likely be around three times higher than using a traditional taxi and five times higher than using competing taxi-hailing apps. The main difference between those apps and Ruyue is that vehicles operating through the latter service will go through a local approval process, ensuring that the vehicles are ‘legal and safe’.
The announcement comes days after Guangzhou’s transport authority (the same one that is backing Ruyue) ordered raids on the Guangzhou office of Uber. Less than a week later, on May 7, authorities also raided the US-based ride-share app’s office in Chengdu, after suspecting that the company did not have “legal status” to provide taxi service in the city.
Observers doubt whether the government-sanctioned app will match its competitors and have criticized the government’s attempt to monopolize the market.
“…to ban Uber on one side but develop a government-owned and Uber-like system on the other really damages the image of the Chinese government,” SCMP‘s George Chen wrote. “Guangzhou’s Ru yue move contradicts Beijing’s promise to be more open and fair to foreign business in China.”
Ding Li, a professor of economics at the Academy of Social Sciences of Guangdong Province, agreed that the government would be better off laying out regulations and ensuring the sound development of up-and-coming companies rather than trying to compete with them.
Uber has expanded to 56 countries and now has presence in 11 Chinese cities, still small potatoes next to the recently merged Chinese apps Didi Dache and Didi Kuaidi, which offer services in over 300 mainland cities.