Shanghai cracks down on booming taxi app market

The Shanghai city government has followed Beijing's lead by restricting the use of increasingly popular taxi booking apps, putting investment into the technology by local and foreign companies at risk. New rules ban the use of booking apps by cab drivers during rush hour periods and ban their use entirely by private vehicles licensed for hire, according to a statement released late on Wednesday by the Shanghai Municipal Transport and Port Authority. The fast-growing sector attracted over $43 million in investment over the last two years, according to internet data firm iResearch, from the likes of tech giants Tencent Holdings Ltd and IPO-bound Alibaba Group Holding Ltd, as well as U.S. venture capital firm Sequoia Capital. The market is dominated by Didi Taxi and Kuaidi Taxi, backed by Tencent and Alibaba respectively, which together held almost 90 percent of the market by daily taxi app orders last year, according to iResearch.



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