China’s transport ministry is drafting rules for online car-hailing services to protect passenger safety by banning the use of private cars.

Operators of online ride-booking services will be held accountable for potential disputes, the ministry said in a statement on its website Saturday. The government is also encouraging traditional taxi companies to upgrade their services using mobile-Internet technologies, according to the statement.

China is considering regulations that would force ride-booking apps such as Uber and Didi Kuaidi to use commercially registered cars and drivers, and would allow city governments to limit permits for those services, people familiar with the plan said last month. The proposed framework will challenge their current business model of signing up owners of privately owned cars and matching them with riders.

The growing use of such apps in China has made taxi hailing more difficult for those who don’t use them because some taxi drivers sometimes rely only on online orders, the ministry said in a separate statement.

–With assistance from Keith Zhai in Beijing.

To contact Bloomberg News staff for this story: Zhang Dingmin in Beijing at To contact the editors responsible for this story: Stanley James at Iain Wilson, Michael S. Arnold

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Photo Credit: The Chinese government wants to encourage mobile use for its taxi industry and is considering the ban of private cars for ride-hailing apps and companies. Pictured, taxis in Shanghai's downtown on February 3, 2006. Aapo Haapanen /