In a move that will be welcomed by people using online ride-hailing services, Didi and Uber, the two largest companies in the business, will have them insured in case of accident.
Uber announced a coverage of one million yuan yesterday as part of its efforts to ensure the safety of passengers.
Didi made a similar announcement on Tuesday.
Didi said drivers will enjoy the same benefits as passengers from the insurance, which rounds up to around 1.2 million yuan.
The two companies have been working to regulate their ride-on-demand business, after the city's transport authorities gave the first license for online ride-hailing service to Didi earlier this month.
Uber said it has applied for a license.
The ministry of transport had recently urged online car-service providers to buy insurance for passengers.
The insurance on Didi's platform is provided by Ping An Insurance and covers passengers and drivers using the company's private vehicle hailing, car pooling, bus, test driving services and other businesses.
Uber said in addition to its insurance, which is provided by China Taiping, the company is also building a safety net for passengers with the passengers' emergency contacts updated during their journey.
Safety issues were the major concern in the business.
"I'm glad to know that the ride is insured," said Zara Zhang, a regular user of the ride-hailing app. "If anything unfortunate happens, the driver can rush me to the hospital, rather than leaving me alone due to compensation fears.
At least I am financially secured just like I am when hailing taxis."
