Beijing is set on cracking down private cars posing as taxis and taking passengers through taxi-booking software.
Local authorities would arrest private car owners using their vehicles as taxis through these apps because it is illegal.
According to the Beijing Transport Law Enforcement Corps, these operations can seriously affect legitimate taxi firms' income in Beijing.
"We will focus on inspecting illegal taxis using software such as Didi Zhuanche and Yidao Yongche, and stiff penalties will be imposed on those found guilty," the announcement regarding the crackdown reads.
An illegal driver who has been caught abusing the app and getting passengers using his private vehicle was already fined with 20,000 yuan. His car was also confiscated when he was caught at the Beijing Capital International Airport on Tuesday.
In 2014, various taxi-booking software have been created. Car rental companies also launched an app that would provide passengers the chance to select other types of cars aside from taxis.
A transport law officer pointed out that the problem with these applications or software is that the car-rental companies do not routinely check the drivers' qualifications, so private car owners are able to abuse the software to earn money under the guise of a legal car renter.
Ye Yun, a media officer representing taxi-booking app company Kuaidi Dache, shared to the Global Times that companies are responsible for the problem.
Legal car rental companies should be diligent in making sure that their cars do not "belong to private individuals," he stated.
Aside from Beijing, Shanghai is also said to be staging its own crackdown.