Didi Chuxing, China's largest mobile-based car-hailing services provider by users, is launching a trial program with Shanghai local taxi rental companies that could replace the dominant management system of charging a monthly rental fee for taxi drivers, the Beijing Times reported on Monday.
Initially, Didi and Shanghai-based Seagull Holding will set up a service center for taxi drivers. For instance, the center can help drivers to pay taxes and insure their vehicles, and also provide subsidies to drivers to cover the fees for taxi meters and updates of cabin dome lights.
Taxi drivers will have to pay 50 yuan ($7.87) each month for all services at the center, according to the Beijing Times, who quoted an unidentified person from Didi Chuxing who is responsible for the matter.
At present, taxi drivers pay taxi rental companies fees of thousands of yuan each month. The going rate in Shanghai can be as much as about 8,000 yuan per month.
For a long time, taxi drivers around China have demanded a reduction in rental fees, which they say can eat into their profits.
The trial program is significant to push forward reform in the taxi industry, Sun Jianping, director of the Shanghai Municipal Transport Commission, was quoted as saying in media reports.
But some insiders worry that the new model cannot generate profits and won't last long. The new model still needs the support of the government and taxi drivers, media reports said.
Also, Nanjing, capital of East China's Jiangsu Province, lowered the monthly rent by as much as 800 yuan for drivers in April, media reports said.
