Contractualissues In Online Ride-hailing Service

With the increasing pervasiveness and popularity of Uber in the United States and worldwide, China saw the burgeoning of independently developed ride-hailing APPs in its domestic market. Representing an emerging form of modern mobile life, APP-based ride-hailing services outperform traditional taxi and other vehicle-for-hire services for its accuracy, convenience and economy, and is therefore widely welcomed and recognized. Nowadays, an increasing number of people see taxi service ordered online through mobile APPS as their first-choice means of transportation. However, with the popularization of ride-hailing APPs, the disadvantages inherent in this form of technology and its other “side-effects” have come to light.The Article seeks to address the legal aspect of the development of the new technology. It attempts to analyze the nature and characteristics of the relationship between the relevant parties while ordering and using taxis. It contends that a passenger transportation contract is formed as between the passenger and driver via online taxi hiring whilst fully noting the distinction between such contracts and those formed in traditional taxi hiring process as in the timing and mode of contract formation. On the premises, the Article further addresses the issue of performance contractual obligations, breach of contract and regulations of the new market.During research, it came to the attention of the Author that operators of the ride-hailing APPs failed to fully consider the relevant legal framework when developing the APPS. Consequently, users of the APPS often run into conflicts with the relevant laws and regulations. The issue is particularly outstanding in the taxi market. The prevalence of ride-hailing APPS provides taxi drivers with a new avenue to receive passengers. This new mode, however, is not entirely compatible with the traditional mode of receiving passengers. Taxi drivers who accept orders online have to ignore potential passengers hailing on the roadside even though its compartment is empty. As those drivers often omit to signal the occupancy of the taxi, it is still considered vacant to potential passengers. Accordingly, failure to answer the hailing of potential passenger may constitute refusal to take passenger,violating their obligation under the compulsory contracting regime.On another front, part of the functions of the ride-hailing APPs may pose challenge to existing regulatory regime. Contract Laws of the PRC provide for the obligation of compulsory contracting on the part of taxi drivers. In this connection, the function of the APPs to raise rate may result in breach of this obligation. The existence of the function offers taxi drivers a perfect excuse to select his counterparty, thus frustrating the legislative intent. Moreover, the laws of China has made unambiguous provisions for contracting fault liability and liability for breach of a contract of taxi drivers as regards the traditional mode of taxi service. Due to the online nature of the APPs, the existing laws are not entirely applicable to the new context, thus being rendered inadequate to protect the rights of passengers. In addition, because of the lack of specific regulation on the provision of online taxi-hailing service, the market for online taxi-hailing is relatively chaotic, manifested in the lack of unified standard for driver qualification, the existence of loopholes of the APPs threatening the informational safety of passengers and the lack of clarity as to the proper scope of responsibilities of APP operators.Due the lack of total compatibility with the existing legal regime, ride-hailing APPs, as an emerging form of technology, has found itself in a dilemma. This, however, does not warrant total ban. Ride-hailing APPs have become part of our life – it brings tremendous convenience for transportation and eases pressure on the taxi market. Notably, with the proposal of Interim Measures on the Management of Online Taxi-Hailing Service(Consultation Paper), steps have been taken to regulate the application of the APPs. By reason of the foregoing, whilst there exists large room for development for the APPs, it is imperative to conduct in-depth study of the legal issues related to this new form of technology.