Authorities raided the Chengdu, China office of popular US-based crowd-sourced taxi service Uber on May 6, about a week after its Guangzhou office was raided on accusations of operating without a license and conducting illegal business.
Officials claimed that the crackdown was part of a comprehensive operation against unlicensed taxis; China is certainly not the first country go after Uber for that reason. But some believe the raids had other motives — to protect domestic taxi-hailing services by clamping down on a foreign competitor.
Uber made its debut in China in February 2014 and currently operates in about 10 Chinese cities. Its deal with Baidu, the country's biggest search engine, in December 2014 has given the app access to Baidu's map and boosted its business in China.
But in January 2015, China's Ministry of Transportation announced a ban on private cars offering unlicensed taxi rides via mobile apps. Not long after, China's two largest domestic operators of taxi-hailing apps — Kuaidi Dache, backed by Alibaba Group, and Didi Dache, backed by Tecent Holdings – decided to merge. They claimed they would more closely monitor services by connecting their passengers to cars owned by rental agencies — licensed third parties according to guidelines set by the Ministry of Transportation.
In March, Didi Dache held talks with Uber for a partnership arrangement that would monopolize the market. Uber did not comment on the news.
In seems that Uber is in favor of competition. In addition to working with private car rental agencies, Uber China has developed a “People's Uber” carpooling strategy to recruit more private cars into its network. Thomas Luo, a tech blogger, praised the company's courage to set up such a platform:
Although a large number of shabby private cars have entered the Uber market […] the drivers are catering to customers’ needs — the market equilibrium helps Uber get people's support in China. The people-oriented Uber and its “People Uber” service has evolved into another rental car operation system for those private drivers who were kicked out from the official rental car system (the official term for them is “black cars”.) The system depends on people and the platform is operated according to people's demand and supply. […] Because of [such a people-oriented set-up], its competitors are very nervous. WeChat has blocked the public accounts of Uber in many cities under the pretext of “spam marketing” […]
But the Chinese authorities are not a fan of this “people-oriented” business strategy. Luo believed Uber's foreign background is the main reason behind the crackdown:
For US- based technology companies, which attempt to develop business in China, if their strategies are conservative, they would be humiliated as not being localized. Yet, if they are determined and proactive, they would face a lot of pressure — that's what happened to Google China back in 2008 and today's Uber.
Yet Uber is different from Google — Google's business in China from day one was confronted with cultural and ideological barriers and eventually the difference in values between Google and Chinese regulators reached a breaking point. Uber's values are based on its convenient, economical and profitable service. Being driven by interests is universal, and when the business affected others’ interests, authorities stepped in […]
In addition to the raids on Uber's offices, Chinese police has been targeting Uber drivers in major cities, some going undercover by calling cabs through the application as customers.
However, Luo was quite optimistic about Uber's future. He believes that people will develop their own strategies to tackle the crackdown:
Take a look at Beijing and Guangzhou where the “People's Uber” service is severely suppressed — turn on the Uber apps, and you will see in the map lots of “People's Uber” private cars that can offer their services within five minutes. Perhaps some drivers will call back to check if the police are conducting a “fishing operation”. Some drivers will even suggest stopping at the airport car park to prevent police checks. Some might decide on a secret code with you before you get in the car. Basically, business as usual […]
He urges people to take sides and support “People's Uber”:
This is a people's war over “People's Uber”. We come from different places and gather on one platform because we want to enjoy freedom and convenience when we travel. When Uber drivers ask for your phone number, please be understanding and patient — this is a secret code. Every transaction is leading to freedom.
Judging from the reactions on social media, Uber indeed has won the support of many. But the country's policies do not necessarily side with the people, as implied in Audrey Li's observation regarding Chinese journalist Michael Anti's comment on the crackdown in Twitter-like Weibo:
Concerning the crackdown on Uber's Guangzhou office, Micheal Anti has a very bright comment: It seems that the government is incapable of solving the traffic problem, but capable of “solving” those who are capable of solving the traffic problem.
Public transportation is usually very poor in over-populated Chinese cities. That's why Michael Anti's comment is echoed by many in the post thread, such as this one:
It won't solve the question raised by people, but it will “solve” those who raise the question.