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Taxi industry reform: making it a 'fare' deal

2011-08-03 10:30    Ecns.cn     Web Editor: Ma Cunyu
A taxi driver shows receipts for fuel surcharge. Beijing raised its taxi fuel surcharge from 1 yuan to 2 on April 9.

A taxi driver shows receipts for fuel surcharge. Beijing raised its taxi fuel surcharge from 1 yuan to 2 on April 9.

With long hours, rising fuel prices and increasingly unstable incomes, life keeps getting harder for taxi drivers across the country.

(Ecns.cn)--Mr. Wang, a cab driver in Shanghai, has an average monthly income of 2,000-3,000 yuan ($310-466) and generally works 18 hours in a shift, followed by a day spent mostly sleeping.

"I work like a robot one day, and sleep like a vegetable the day after," he said.

Life is no easier for Wang's counterparts in any other cities across the country.

Every morning when Liu Ming, a cabbie in Beijing, wakes up, he must first worry about covering the taxi company's rental or management fee, which amounts to about 100 yuan a day - even if he doesn't go to work.

For the first eight hours of their shifts, cab drivers like Wang and Liu must focus mostly on paying the lease fee and fuel costs. Only later do they start to make their own money.

Like most cab drivers, Liu does not own the car, and must share it with another driver. Liu works a 24-hour shift, split by a nap in the taxi for a few hours around 2 a.m. He then continues driving until 9 a.m. before turning over the taxi to his partner, who will drive for the next 24 hours. Even so, Liu wishes he could extend the exhausting shift just to cover the increasing fuel costs.

Raising fares no easy fix

More than a thousand discontented taxi drivers went on strike Monday in Hangzhou, the capital city of East China's Zhejiang Province, complaining about increasing gas prices and worsening traffic jams.

Hundreds of cab drivers drove to different parts of the downtown area during rush hour, asking their colleagues to join them, even if they were carrying passengers. The drivers were still on strike by Monday afternoon despite the presence of local police.

The drivers demanded a decrease of the rental for their cabs and an increase of the minimum fares. They also wanted their regular operation costs to be lowered, referring mainly to road maintenance fees and other expenses.

In response, the Hangzhou municipal government paid temporary subsidies to the cab drivers and promised to hold a public hearing in the near future to discuss raising the minimum charge.

To solve the problems pestering the taxi industry, many local governments are grasping at straws by raising minimum fares at the expense of consumers.

Shanghai increased the basic fare for all passengers traveling up to 2.3 km from 12 yuan to 13 yuan, plus a 1 yuan fuel surcharge; on July 18, a public hearing held in the southern Chinese city of Guangzhou attempted to link taxi fares to fuel prices. Beijing raised its taxi fuel surcharge from 1 yuan to 2 on April 9.

But this is by no means a permanent solution, according to experts.

Li Jingsheng, an urban planning professor at Tongji University, said it is a vicious circle, because raising fares only benefits the taxi companies, but blights the governments, drivers and consumers.

Li's comment was verified by the real-life experience of Mr. Wang, who said he has earned even less money since the last fare increase.

"The last charge increase to 12 yuan resulted in less people taking cabs," he told the 21st Century Business Herald. "Consumers complain about the fare hike and take the subway and buses instead."

A web user also posted an article on an Internet forum Monday, saying some taxi drivers in Shanghai had gone on strike that day. The National Business Daily said in a report Tuesday that labor inspection authorities were investigating the matter.