The rise of online ride-hailing services and their impact on urban transport in China

Online ride-hailing services (ORS) (including tailored taxi services, express taxi services,1 ride-sharing services, and so on), as a new business mode using mobile Internet technology for ride-hailing and commuting services, started in San Francisco in the US in 2009 and expanded rapidly to major cities across the globe. ORS initiated a revolution against traditional taxi services and has had significant influence on the commuting preferences of city residents and urban transport. China is one of the pioneers in terms of online ride-hailing services. The first Chinese ORS provider started operation as early as 2010, after which various ride-hailing mobile applications and operating platforms came to the stage. Chinese online ride-hailing markets have experienced the phases of birth, rapid growth and regulation through official supervision by the government. The rise of online ride-hailing services has reshaped the entire landscape of the taxi industry and Chinese cities’ traffic dynamics; therefore, it is necessary to have a systemic overview of its developing status in China and discover its effect on policies developed to address the traffic in Chinese cities. A detailed discussion will follow. Section 2 analyses the reasons for the ORS boom in China from the perspective of its background, developing phases and modes. Section 3 will develop a theoretical model to analyse the impact of online ride-hailing services on city traffic, in alignment with some empirical evidence from a few Chinese cities. Section 4 will briefly introduce the new regulation framework rolled out by the Chinese government in 2016 and discuss its implementation in different cities. The last section will provide relevant discussions and policy propositions.