Passengers' insurance is also an obstacle to overcome.

The China Insurance Regulatory Commission said late last year that insurance companies would not cover accidents involving private cars that offer car-hailing services.

"The insurance premium for private cars is much lower than for taxis. If a private car is involved in a traffic accident when providing car-hiring or car-sharing services, the insurance company can refuse to pay the car owner," said Kan Xiaodong, an insurance expert.

Hope

Ride-sharing companies see a slimmer hope of gaining legitimacy and further growth after Chinese ministries vowed to encourage the popular means of transport recently.

A notice released by 10 ministerial-level departments including the National Development and Reform Commission on March 1 said China "encourages orderly development of online car booking and ride-sharing."

The move is part of the nation's drive to encourage green consumption and marks the first time the government has taken a clear, positive stance on ride-sharing in the form of legal documents.