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Uber faces effective ban in China

Transport officials slap moratorium on private-car hire through hailing apps

Law and regulation, Government, Uber (www.uber.com/)

Internet cabbie firm Uber faces a critical blow to its business model in China, after the country's transport authorities issued a ban on private vehicles offering services through apps, the Financial Times reported.

Uber offers private drivers the opportunity to illicit fares through membership of an online system, without the need for registration as a qualified public-service driver. The company's approach is coming under increasing pressure from national regulators as they seek to control a new segment of the public transport industry.

A spokesperson for China's transport ministry, writing on the department's website, urged "an end to illegal operations that may hurt consumer interests and fair competition". However, the ministry said it applauded the innovation behind apps such as Uber and said they had had a "positive role". The comments also may have left the door open for companies to rent out cars they owned.

"Banning private cars from using the apps will put passengers at ease," the spokesperson said. "But apps for premium car services have an innovative service model and play a positive role in meeting the high-end and differentiated transportation market".