DAZHONG Taxi, one of the city's largest cab companies, launched its own online ride-hailing application yesterday, assuring that all vehicles registered on the platform are licensed to operate.

By launching Dazhong Go, an Uber-like mobile-phone application, the traditional firm aims to draw customers away from emerging rivals with a properly licensed service.

As private car owners are not permitted to provide the profitable service under the current regulations, a large number of vehicles registered on Didi and Uber, two online car-hailing services in China, are actually driving in a "gray area," which has triggered a debate about legalities and whether the public needs the service.