Didi Kuadi taxi service violates regulations, Beijing authorities say

A Chinese mobile phone user uses the taxi-hailing app Didi Dache backed by Tencent on his smartphone in Shanghai, China, 16 October 2014. [Photo/IC]

Didi Kuaidi, China's largest taxi-hailing app provider by market share, crashed into regulatory barriers in Beijing.

Beijing transportation authorities said on Tuesday Didid's chauffeur services, which employ private cars to offer unlicensed taxi rides for consumers, violate regulations in China.

In a meeting with Didi Kuaidi, Beijing Traffic Management Bureau said that since 2015, it has investigated and fined 207 unauthorized cars that illegally rely on Didi Kuai's platform to make for-profit trips, and that 161 of them are private cars.

The announcement comes the day after Didi Kuaidi launched a car pooling service to expand its presence in China's transportation sector.

The transportation officials said they encourage new businesses models to address problems in taxi markets but online platforms need to observe existing regulations and laws. They will continue to crack down on illegal practices in the transportation sector.

Didi said it will cooperate with departments concerned to strictly follow laws and regulations. The company also promised to partner with local governments to establish a data platform to monitor cars and drivers on its platform.

Didi Kuaidi, created in a merger between rivals Didi and Kuaidi in February, has 160 million consumers and provides nearly six million trips a day. Over 400,000 drivers offer chauffeur services on its platform.

On Monday, Shanghai traffic and transport authorities launched an online car-hailing service platform with Didi Kuaidi. It is believed to be the first step for the mobile platform to win legal recognition from Chinese authorities.