BEIJING - Starting Thursday, Chinese taxi-hailing and ride-on-demand provider Didi and rival Uber will face a new challenger backed by two state-owned taxi operators in the country's hyper-competitive transportation services market.

Two taxi operators in the Chinese capital, Shou Qi Group and Beijing Xianglong Taxi Co., Ltd., jointly launched a mobile app on Thursday to let users book rides with licensed drivers in Beijing.

The state-backed app was launched amid frequent friction between Chinese transport regulators and companies such as Didi and Uber that recruit private drivers and vehicles to offer rides, a practice many local transport regulators see as a violation of existing regulations.

The official ride-on-demand service also came on the heels of Didi's 100-million-dollar investment in American on-demand transportation service Lyft, announced on Thursday, as the Chinese firm ups its game against Uber by teaming up with its rival in the United States.

Shou Qi said the online taxi-booking service targets high-end passengers with sedans and multi-purpose vehicles equipped with WiFi, smartphone chargers, napkins and umbrellas.

The service is also monitored by local transport regulators and will sign up more of the city's eligible taxi drivers and vehicles, steering clear of legal issues surrounding rides by private cars.

Shou Qi and Xiang Long didn't specify the size of their car fleets but said the new service is currently in a trial run and available for booking around airports, hotels and shopping centers in Beijing, where drivers using the Didi and Uber apps have been fined in the past.