Taxi crackdown ensnares Didi Kuaidi app service

The commission will apparently monitor the information in real time. It was reported that it is looking to offer car rental services.

Didi's president Liu Qing said most of the laws and regulation on transportation management in China were formed more than 10 years ago and do not take into account the latest technological trends.

The Uber debate

Didi Kuaidi's rival Uber, which has been banned in 14 countries and regions, said it is confident it can fairly compete in what could be the world's largest market.

"We will find a way to partner and move forward," said David Plouffe, head of policy and strategy at Uber, adding that China may be the best example in the world to show that many options are needed to reduce traffic congestion and emissions.

Uber ventured into China last July and announced it would only work with legal car rental firms. But its sluggish business forced it to change its strategy to work with private car owners since last December.

According to Analysys, a domestic survey firm, Didi Kuaidi, which covers 61 cities, held nearly an 80 percent market share in the first quarter of the year; Uber, which serves 9 cities, accounted for 10.9 percent.

In recent months, Uber's offices in Chengdu and Guangzhou were raided for allegedly organizing private cars not qualified to provide passenger services.

Gu Dasong, executive deputy director of the Transportation Law and Development Research Center, claimed that passenger information is frequently sold to Uber drivers, who then allegedly use the contact info to drum up fake orders.

He said this issue should be addressed by the government.

The alleged scheme by some Uber drivers works like this: Drivers buy passengers' information at a low price and issue fake orders to Uber in a bid to earn a subsidy.

They can apparently earn as much as 7,000 yuan ($1,147) in a week if they make 80 orders.

Qi Chengyuan, a department director at the National Development and Reform Commission, said the country has begun mulling new management regulations on the taxi sector.

Dai Tian and Hao Yan contributed to this story.