In December, the Shanghai government detained 12 private car drivers using mobile phone apps and fined each driver 10,000 yuan.
Eight second-tier Chinese cities last year ruled some drivers' pick-up services through apps were illegal.
The ministry said it encourages and regulates innovation in taxi and car-hire businesses. It would continue monitoring the sector, and called for app companies to abide by the law and act responsibly.
Regarding unlicensed drivers, our reporters discovered that a private car owner with no proper training could create difficulties for passengers.
A Yidao Yongche app user treated a friend with a premium service to the airport. When the driver tapped "arrived at destination", the app charged automatically to the app user's authorized credit card. But then the driver charged the passenger again, in cash, and failed to deliver him at the Yongche Inc's VIP boarding service, as advertised on their website.
Drivers have said that app companies are automatically taking some money from them each time they reach a destination.
But app companies were quoted as saying it is the responsibility of car-hire companies, with whom drivers sign contracts, to manage and monitor the drivers.
In the past few months, app companies have been lavishing drivers with subsidies and giving free coupons to passengers. One driver said he got 100 yuan for each ride, and passengers received coupons valued from several yuan up to 100 yuan.
Thanks to these financial incentives, many drivers joined the pick-up service and started using driver-end apps to boost their personal incomes.
Also attracted by the subsidies, a number of private car owners simply signed a contract and joined the app platform.
One private car owner changed his compact car to a full-size sedan so he had the type of car preferred by these premium pick-up services.
The Didi Dache app was developed by Beijing Xiaoju Tech Co, while Kuaidi Dache app is run by Hangzhou Kuaizhi Technology Co. They have been battling nationwide for a slice of the taxi-hailing business for the past year.
China Daily has contacted all of the app companies mentioned in the past two days, with no response.
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