Cabbies strike over high fees, phone apps

By Yuen Yeuk-laam and Cao Siqi Source:Global Times Published: 2015-1-12 0:58:01

Analysts urge eased govt monopoly on local taxi industries

China has witnessed a series of protests by taxi drivers in the past few weeks, as public debate rages as to whether the industry should be made more market-oriented and how taxi and car-hailing mobile apps should be regulated. 

Following taxi strikes in Shenyang, Liaoning Province and Dongyang, Zhejiang Province this month, taxi drivers in Nanjing, Jiangsu Province took to the streets the past weekend, bringing the city's traffic to a standstill.

About 100 taxis parked outside Nanjing's South Railway station, refusing to carry passengers. The protest later spread to other areas in the city, such as the city's airport, leaving passengers stranded.

The strike continued for two more days, with taxis scarce on Nanjing's roads. Many drivers claimed that their vehicles were "not in service," forcing passengers to take the bus or subways. The protests turned violent on Friday and Saturday, with striking drivers attacking drivers who had not joined the protests.

The protesting drivers called for a reduction in the monthly franchise fees they pay to taxi companies - as much as half of their total fares, in some cases - an increase in taxi fares and additional charges for long-distance rides. Traditional taxis have been hard pressed following the rise of new services that allow private cars to serve as taxis.

Yin Hao, a local driver and a part-time teacher at a local transportation management departments' training center, told the Global Times that monthly franchise fees eat up a large share of taxi drivers' revenue.

"The government added 3,000 taxis [to Nanjing] during the 2014 Youth Olympic Games. The drivers had to pay [franchise fees] of about 9,000 yuan ($1,450) monthly. If the business wasn't good, things would be tough for drivers - who worked at least 12 hours a day - after they were done paying the franchise fees," Yin said.

Many taxi drivers said that after deducting franchise fees, they only make about 4,000 to 5,000 yuan in income per month, barely enough to make ends meet with living costs in the city rising.

According to the Xinhua News Agency, the number of taxi licenses is strictly controlled by local governments despite an increase in demand in recent years. The scarcity has caused license prices to spike to over half a million yuan in Shanghai and over 800,000 yuan in Shenyang, which has in turn translated into higher franchise fees. 

Some taxi drivers said they have to work 15 hours per day to be able to pay franchise fees. Others complained about a lack of transparency in the fees.

"We're asked to pay fees for 'management service' but were never told what was included in the service," a taxi driver told the Global Times. 

Other experts said that new car-hailing apps such as Didi Dache, which allow private cars to operate as taxis through mobile phone apps, are one of the common triggers for taxi strike, as the taxi market becomes competitive.

Gu Dasong, an associate professor specialized in transport laws at Dongnan University, suggested that local governments should study the impact of mobile phone apps on the taxi industry and be more transparent about franchise fees to help ease drivers' concerns.

Thousands of taxi drivers also went on strike in Shenyang, Liaoning Province on January 4, protesting car-hailing apps and government mismanagement of illegal taxis.

Zhu Tao, a transportation expert at the Beijing University of Technology, believes that "the traditional taxi industry has long been monopolized by the government, and it's time to open the market to the private sector."

He argued that the new service saves time for both passengers and taxi drivers and that the government should seek the views of city residents, transportation experts and private transportation companies to help calm the taxi-hailing market.

Apart from franchise fees and increasing competition, drivers have also complained that excessively low fares, low fuel surcharge allowances, low compensation for time spent stuck in traffic and the new ride-hailing apps have greatly hurt their incomes.

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