Didi beats Uber to legalised status in China
Uber and Chinese rival, Didi Kuaidi, are taking steps to operate legally in China, a key market for both firms, but where their car hailing services currently operate in a regulatory grey zone. Uber China said in a statement yesterday that it was "actively preparing" documents to apply for a licence to operate an online car-hailing platform to meet new regulations governing the sector. However, Didi Kuaidi, seems to have got in first, also making an announcement yesterday, but saying that it had received a car booking licence for its operations in Shanghai and that it was seeking more licences from other cities. "This licence is a key milestone for the official recognition and the legal status of private car-hailing services in China," Didi Kuaidi said in the statement.

Uber’s main rival in China, Didi Chuxing — which recently partnered with Lyft in the U.S. — announced Thursday that it has become the first car-hailing app in Shanghai to be licensed under the Shanghai Municipal Transportation Commission. Didi says it’s pushing to become the “world’s largest one-stop mobile transportation platform,” and that the new license actually makes it the “first legally authorized operator of an online private car booking platform in China.”

Uber, meanwhile, announced today that it has committed nearly $1 billion in additional funding for its China expansion, as it readies its application for the new government-mandated permit — which it appears Didi has beat it to. But Uber does claim it’s now “the largest registered Internet company in Shanghai.” It just registered there as “Shanghai Wubo Information Technology,” with a registration capital of about $330 million.

“The Shanghai Internet Car-Booking License is the first of its kind in China, as well as globally,” Didi’s chief executive, Cheng Wei, said in a statement. “It is a landmark moment in the development of China’s urban transportation and mobile internet.”

“This new ‘Shanghai Model’ engages both regulatory bodies and the private sector to create an effective solution to urban commuting challenges… Didi Kuaidi applauds Shanghai for embracing innovation and pushing forward the process of legalizing private car services,” he added.

To land the license, Didi had to meet strict criteria, including the possession of an ICP license, agreement to host its servers in China, data protection in compliance with China’s law and regulation, and adequate screening and certification of drivers and vehicles. Wei also said that it will be imperative to “work closely with city governments and transportation authorities across China to pursue regulatory innovations following Shanghai’s example.”

Both Didi and Uber continue to raise huge rounds of financing to conquer China. The next phase of growth appears to be around making sure their business models comply with Chinese laws, and that’s what today’s announcements have been about.

“We believe private car licenses will improve the broader operating environment, strengthen overall industry regulations, raise safety standards, and enhance service quality to the benefit of passengers, drivers, and regulators,” he concluded.