China released new nationwide regulations concerning ride-hailing services on Jul 28, permitting private vehicles to pick up passengers as part of services offered by car-hailing platforms. The regulations will officially take effect starting Nov 1, 2016.

China’s car-hailing services have seen a booming development in recent years despite the operations fall under a gray area of the government’s control. Upon implementation of the new regulations, they will finally become “legal”.

Ride-hailing companies, such as Didi Chuxing and Uber, have to be more responsible on checking on vehicles to ensure that they are in good conditions and insured, as well as to report the results to corresponding transportation bureaus.

The new rules demand that car-hailing platforms and their drivers shall secure and receive licenses from the government. Apart from regulations on drivers that they must have three or more years of driving experience and no criminal records, three other rules also apply upon ride-hailing vehicles, namely 1) the vehicle must be equipped with fewer than seven seats, 2) a dashboard cam and satellite positioning equipment to record driving conditions must be installed, and 3) there should be less than 600,000 kilometers on the odometer and be operated less than 8 years.

On a separate note, the two leading taxi-hailing companies Didi Chuxing and Uber Global have gained billions of investment in recent years from technology giants including Apple Inc.