The app will be run by a newly-established company called Ruyue, which means 'on time', or 'as promised'. The service will have access to around 3,000 cars, all from the four licensed taxi companies in the city the Financial Times said, citing the Southern Daily, a local Communist Party-affiliated newspaper.
According to PingWest (link in Chinese), the Guangzhou Municipal Committee said the service will supply a car within 5 to 8 minutes of an order being placed through the app.
Unlike Uber's service, Ruyue will only use licensed drivers and will not take payment through the app, Pingwest said.
The cost to the user is likely to be up to three times standard taxi hire prices, but this does not translate into higher driver income, Pingwest said.
Uber was closed down in a police raid earlier this month, accused of running an 'illegal' service although no formal charges have yet been made, the Financial Times said.
US companies have increasingly been facing difficulties operating in China, according to the American Chamber of Commerce. A survey by the chamber found that 47% of respondents said they felt "less welcome" in China than previously, and 57% of respondents believed foreign firms were being scrutinised under China's pricing, anti-monopoly and anti-corruption campaigns.