Authorities in Beijing said ride-on-demand services offered by Didi Kuaidi and Uber Technologies Inc. have added to the city's traffic congestion during a meeting between eight municipal government bodies and the two companies on Thursday.
All eight government bodies, including the city's transportation regulators, police, economic planner, tax authorities, telecom and internet regulators, reported Didi Kuaidi and Uber are suspected of running illegal passenger transportation services, unapproved advertising and tax evasion.
The two rivals in China's transportation services have been frequently engaged by local regulators in meetings where they receive warning or are criticized for violating existing regulations.
Such frequent encounters with authorities highlights the regulatory uncertainties facing taxi-hailing, ride-on-demand and other services offered by internet companies and authorities' tolerance of disruptive changes these firms have brought to public transportation.
Statements from both companies in a government press release said they will address problems raised by authorities, conduct their business in accordance with the law and subject themselves to regulation.
The Beijing Municipal Commission of Transport said in a statement that public transportation should be prioritized in Beijing's transportation development plan while taxis should only serve as a supplement as they occupies ten times the road space of regular vehicles.
Although ride-on-demand services have met a need, they have worsened the city's traffic. Such services, along with the drivers and vehicles being used, do not have qualifications and are not adequately regulated, the commission said.
It also said it is working on a reform plan that will leverage the internet to improve taxi services and will intensify a crackdown on illegal services.
The crackdown on ride-on-demand services in Beijing this year has seen more than 1,200 vehicles mobilized by Didi Kuaidi and 170 mobilized by Uber punished by the city's transportation law enforcement.