Uber comes under Scanner of Chinese Officials
Chinese officials have widened investigations into the operations of the mobile taxi-hailing service Uber. The company is facing legal charges in several other countries for unfair competition and improperly vetted drivers.
On Wednesday, the Chinese officials have visited Uber offices in the southwestern city of Chengdu to ascertain if Uber was allowing private drivers to offer their services via the taxi-hailing app. This January, the Chinese government banned drivers of private cars from offering such services through apps.
The company is valued at $40 billion and has established a presence in more than 250 cities around the world. The company allows passengers to summon taxi drivers in about 10 Chinese cities. Such services are immensely popular in China’s congested cities, particularly Beijing and Shanghai.
Uber faces heavy competition in China as it is has arrived late in the Chinese market. There are established domestic services like Kuaidi Dache and Didi Dache which were already popular and are backed by major investors.
Last week, the police raided Uber offices in the southern city of Guangzhou, seizing thousands of iPhones and other equipment used to run the business. The state police doubt that Uber is not adequately licensed to run this business.
The city’s transport commission said that it suspects that Uber is operating an illegal taxi service, without a proper business registration. The commission further notified fines of 30,000 Yuan on any one operating such services.
However, Uber described the Wednesday incident as a ‘routine visit’. It stated, “We maintain open channels of communications, cooperating proactively with the authorities to help answer their questions on our local operations”.
Uber will have to face several legal and regulatory challenges, as it continues to expand services in the United States and elsewhere. India has already curbed its operations in certain cities; in New Delhi, in southern Hyderabad and in the entire state of Karnataka.