Uber is officially legal in China

Photo: David Ramos/Getty Images.

It’s official: Uber and Chinese rival Didi Chuxing have the green light to operate in China.

Bloomberg reports that the government plans to formally allow both companies to operate starting in November, and wants to encourage the growth of the sharing economy in China.

The new laws do come with certain rules, however. Drivers for ride-hailing apps can’t have a criminal record, will have to have three years of experience as a professional driver, and be licensed by a local taxi regulator, according to The New York Times. Drivers also may not operate a vehicle with more than 600,000 kilometers (about 370,000 miles) on it.

While both companies have been offering their services in China for years, the move by the Chinese government is important for several reasons. First, it creates a legal framework for both ride-hailing services, something which countries in Europe and many states throughout the U.S. haven’t been able to figure out. The move also legitimises the battle between Uber and Didi, who are bitter rivals in the fight to become the most popular ride-hailing app in the world’s biggest market.

Just last week, Uber investors called for a “truce” between the two companies. Investors are worried that the costly fight will damage both companies in the end, and reports say that investors between the two companies have talked about a deal. Uber said in February that it’s losing more than $1 billion each year in China in its efforts to win over customers.

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