China bans private cars from ride-hailing apps in move that could hurt Uber expansion

Chinese regulators have banned drivers of private cars from offering services through ride-hailing apps, adding a new legal hurdle to Uber Technologies Ltd.'s global expansion.

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The Ministry of Transport said only licensed taxis and limousines may use ride-hailing apps, which are hugely popular in China. The ministry said it took the step to protect the safety of riders.

The ruling could be a setback for Uber, which has run into legal trouble in South Korea and other markets for using drivers who lack taxi licenses.

China's ride-hailing market is dominated by domestic competitors Didi Dache, backed by Internet giant Tencent, and Kuaidi Dache, backed by rival Alibaba Group.

Uber received investment in December from another Chinese Internet giant, search engine operator Baidu Inc.