Existing studies on the formulation of regulations for online ride-hailing platforms merely see the process as a struggle between interest groups. They do not address how policymakers perceive this struggle and act on their own initiative to govern these platforms. This study supplements existing studies by exploring how the metropolitan governments of two Chinese cities, Beijing and Shanghai, perceived conflicts between contending forms of chauffeur businesses and brought in regulations for new platform ventures. This thesis employs a policy change approach in the Chinese authoritarian context and reaches three conclusions. Firstly, it explains that the "special interests" of taxi entities institutionalized by the old regulatory regimes for taxi businesses incentivized the two metropolitan governments to protect taxi entities. Thus, even if Beijing and Shanghai had different first responses towards platforms with one initially emphasizing "cracking-down" and the other working on a "loose" regulatory approach, they adopted similar platform-capping policies. Secondly, this thesis finds that the two metropolitan governments cautiously disobeyed the central government's "loose" directives for platforms by combining their capping policies with selectively implementing a central directive of differentiating the markets of ride-hailing platforms and taxi operators. Thirdly, this thesis addresses obstructions to the establishment of "new regulation" that respects the business logic of platforms, which is proposed by the platform coalition. It argues that the interaction between the vested "special interests" and the fragmentation of authority makes local governments resistant to this "new regulation." / Graduate