Photo taken on Aug. 1, 2016 shows a symbol of Didi in Hangzhou, capital of east China's Zhejiang Province. [Photo/Xinhua]

Some big cities in China issued draft new rules regulating ride-hailing apps last week. In Beijing, Shanghai and Shenzhen, the rules stipulate that only local residents and local cars with a minimum of 1.8 liters' displacement can be registered for these businesses.

In Shanghai there are 410,000 drivers providing ride-hailing services, but only 10,000 of them are registered Shanghai citizens. There are about 400,000 non-Shanghai cars in the business, which accounts for 30 percent of non-Shanghai automobiles on the city's roads. That is to say, the new restrictive rules can help reduce traffic congestion in the city.

Beijing traffic administrative department's data show the capital city's congestion became more serious after August 2014 and June last year. The two timings coincide with two adjustments of policies on ride-hailing services.

From April to August, the number of cars from out of Beijing increased by 150,000 on average per month, and most of them were ride-hailing cars.

The new rule on a car's displacement in Beijing, Shanghai and Shenzhen means many lower-end private cars cannot perform the service any more. This is to protect local taxis, which invariably have government backgrounds.

Security is also a factor behind the rules. Many criminal cases have occurred in the ride-hailing cars, and ride-hailing corporations have proven powerless in solving the issue. It is necessary for the government to strengthen regulations of the industry.

The Ministry of Transport legalized ride-hailing services in March. After that foreign investors injected billions of dollars into ride-hailing corporations. If the industry's fast expansion in China is unchecked as it was last year, it will evolve into a potential national security threat to China, as these corporations own large amounts of data, network and transport resources.

The rules issued by the Shenzhen government require ride-hailing corporations to put their servers in China, and the rules issued by Beijing and Shanghai demand that ride-hailing corporations must submit to monitoring and supervisory systems. These terms are out of security concerns.

Moreover, the merger and acquisition between Chinese and foreign corporations in the industry ended the high-subsidy era for drivers, fostered the growth of a monopoly in the sector and threatened China's network information security.

If the momentum is unchecked, the market will be dominated by only a small number of enterprises, leaving all corporate social and public responsibilities to the government.

The ride-hailing corporations do not carefully verify the qualifications of their drivers, and thus shirk their supervisory responsibilities as platform organizers of the business. In contrast, the taxi corporations pay their drivers' social insurance according to labor laws in China, and managing human resources is a big burden to them.

The fast growth of ride-hailing services aggravates traffic congestion in Chinese cities. Urban trips have become more inconvenient and expensive. Developing public transport has proven to be the rational solution to tackling traffic jams in big cities. Ride-hailing businesses, which take the sharing economy as an excuse, go in the opposite direction. It boosts private car ownership and the use of private cars in cities. That's why all countries are reserved in their response to the rise of ride-hailing services.

The Chinese people have fully felt the negative effects of the unchecked growth of the ride-hailing service in the past two years. No other country has been as lenient and generous to the industry as China. It is time to put the controversial industry under effective regulation and supervision.

Yue Zhi is an online commentator.

The article was translated by Jason Lee. Its original version was published in Chinese.

Opinion articles reflect the views of their authors, not necessarily those of China.org.cn.

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