The Ministry of Transport ("MOT") has issued the Administrative Provisions on Taxi Operation and Services (the "Provisions"), with effect as of January 1, 2015. The Provisions consist of 54 articles in seven chapters covering provisions on the general principles, business permit, operational services, operational guarantee, regulatory administration, legal liability and supplementary provisions.
The Provisions specify that the operational right of taxis shall be subject to a limit on the term of operation and encouraged to be allocated through tendering and bidding on the basis of service quality. Meanwhile, the Provisions have established a market exit mechanism, whereby whether the business operation may continue after expiry of the term of operation is linked to the result of service quality and credit evaluation.
The Provisions specify that, where the operational right of a vehicle needs to be transferred, the competent road transportation authority shall alter the operation right of such vehicle in accordance with the law, notify the party concerned of potential risks such as the term of operational right of the vehicle, and sign a new agreement pertaining to the operational right of the vehicle, with the residual maturity of the operational right of the vehicle as the term of operation under the new agreement.