Chinese police visited Uber offices in a second city on Wednesday in a widening investigation into the company's operations in China.
An official at Chengdu's city transportation commission said the visit was part of an investigation into Uber allowing private drivers to offer their services via the taxi-hailing app, which has established a presence in about 10 Chinese cities.
The Chinese government in January banned drivers of private cars from offering such services through apps. Non-licensed cabs, known as “black cars,” are still a popular mode of transport in China’s major cities.
Police raided Uber offices in the southern city of Guangzhou last week, seizing thousands of iPhones and other equipment used to run the business.
“The company is suspected of unlicensed operation and conducting illegal business by allowing private car owners to offer taxi services,” an unnamed official with the city's traffic authority told Xinhua of the Guangzhou raid on Thursday.
The city's transport commission said it suspected Uber was operating an illegal taxi service without a proper business registration and threatened fines of $4,860 to those operating such services.
Uber faces multiples legal and regulatory challenges as it expands in the United States and abroad. In India, it has been banned in New Delhi, the southern technology hub of Hyderabad and the entire southern state of Karnataka.
The Chengdu official, who like many Chinese bureaucrats identified herself only by her surname, Ren, said she had no further information about the investigation there.
There was no listed telephone number for Uber's offices in Chengdu and a spokeswoman did not immediately return an email asking for comment.
The company, which is valued at $40 billion, allows passengers to summon drivers in more than 250 cities around the world.
Such services have become hugely popular in China's congested cities, particularly those such as the capital Beijing and the financial hub of Shanghai where hailing a taxi on the street during rush hour can be all-but-impossible.
A late arrival to the China market, Uber faces heavy competition from more established local apps backed by major investors. Most estimates put its share of the Chinese market at about 1 percent.
Domestic apps Kuaidi Dache and Didi Dache, backed by tech giants Alibaba Group Holding Ltd and Tencent Holdings Ltd, respectively, have 90 percent of the market sewn up. The two said in February they would merge.
Al Jazeera and wire services