A person in Shanghai uses a car-hailing app to call a taxi. File Photo: CFP

China's Ministry of Transport issued a notice to further regulate the country's online car-hailing industry on Wednesday. The new rule aims to maintain fair market competition in the online car-hailing industry, accelerate compliance and promote its stable and sustainable development, said the ministry.

Some online car-hailing platform companies have recruited or allowed unlicensed drivers and vehicles to "bring cars to join" the platform to carry out illegal operations, seriously disrupting fair competition in the market and affecting the safety and stability of the industry, the ministry said in a post on its official WeChat account.

It asks local transportation authorities to urge online car-hailing platform companies to conduct operations in accordance with laws and regulations and accelerate the process of online car-hailing compliance. With immediate effect, access to new vehicles and drivers that do not meet the requirements will not be allowed and the removal of non-compliant drivers and vehicles will be expedited. 

It is necessary to strengthen supervision, strictly regulate law enforcement, comprehensively use online and offline methods, intensify the crackdown on illegal operations of online car-hailing and continue to maintain a "high regulatory pressure," read the notice.

With the tightened regulation from Chinese authorities, including the Ministry of Transport and the market regulator, the Cyberspace Administration of China jointly summoned 11 ride-hailing companies like Didi Chuxing and Meituan Dache and ordered them to stop their "vicious competition" in the latest effort to crack down on brutal competition in the internet sector.

The notice also comes amid an ongoing cybersecurity investigation into industry leader Didi, which has created new opportunities for rivals.

Local transportation authorities must actively work with relevant departments to guide and urge online car-hailing platform companies to comply with laws and regulations, scientifically formulate platform dispatch rules, standardize pricing behavior, improve the benefit distribution mechanism, reduce excessively high commissions, and ensure drivers can get reasonable labor compensation and rest time, said the notice.