Didi Kuaidi, Uber’s biggest rival in China, has received the first ever car-booking license from the Shanghai Municipal Transportation Commission (SMTC).

With this move, Didi became the first legally authorised online private car booking platform in China, giving it a jump-start over close competitor Uber. 

Didi Kuaidi is backed by Internet giants Alibaba and Tencent. 

Uber has issued a statement saying that it will also apply for the license and has set up a local subsidiary registered in the Shanghai Free Trade Zone.

Regulatory issues are the biggest roadblock for car-on-demand service providers, where many drivers don’t possess proper driver licenses.

Uber has long been struggling with regulatory issues in China, and its offices were raided by the police in the recent past in Hong Kong.

Also Read: Uber offices raided in Hong Kong, five arrested

In a more favourable light, Uber launched a new service in late September in Chengdu China, called UberCommute. The carpool-like service would benefit passengers commuting to and from work. Uber announced the news on the heels of the Didi Kuaidi and Lyft cooperation deal. 

Though Uber has been aggressive in its attempts to tap into China — it recently closed a US$1.2 billion deal to enter 100 more Chinese cities over the course of the year — Didi Kuaidi still reigns supreme in the market.