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Reform Expected to Make Taxi Market Fairer
   2016-03-15 06:34:24    CRIENGLISH.com      Web Editor: Chu Yiming

A man displays taxi-hailing app Didi Dache on his smartphone in Guangzhou city, south China's Guangdong province, 17 September 2015. [Photo: Imagine China]

The arrival of ride hailing services such as Uber and China's Didi, have shaken up the taxi and car hire sector in a big way.

More and more Chinese people are enjoying both the convenience of the new services and the cheaper prices they often bring. However, It's not been such good news for traditional taxi operators.
 
But help may be at hand. China's transport authority has said it's working on a plan to create a fairer competition environment for both old and new players in the market.

CRI's Li Jianhua has more details.

 

Wang is a taxi driver in his fifties. He's been driving cabs in Beijing for a long time.

He says he made a loss in the first two months of this year, and estimates he'll see another loss in March.

"Last year, since the popularity of the app, it has become harder and harder to make money. Previously, I could earn 400 or even 500 yuan a day. But now my daily income is around 300 yuan."

Drivers have to pay a fixed amount every month, which includes the government's portion of franchise fees, vehicle depreciation, insurance and management fees, regardless of how much they earn. Wang says the monthly fee imposed on taxi drivers is a heavy burden.

"5,500 yuan (per month). That is about 200 yuan per day. I think we're overcharged. Taxi companies should cut the fee, and the government should take some action. "

In addition, traditional taxi companies have to pay municipal authorities in order to get licenses to operate their business. Those costs are also passed on to the drivers.

The new high tech arrivals in the sector, the ride-sharing services such as Uber and Didi are exempted from such fees as well as other regulations.

Liu Xiaoming, head of Transport Service Department of the Ministry of Transport, says they are aware of the inequality.

"If only traditional taxi drivers have to pay the fee, obviously, it would create an unfair competition environment between old and new players. Therefore, we have made it clear that the right to operate taxis must be free of charges within a limited period."

Liu says they would like to ease the burden on traditional taxi drivers, and encourage them to gain a larger market share by providing a better service.

The official added, to reach that goal, the authorities are planning to establish a mechanism through which taxi drivers can bargain with the companies over monthly fees. He said the scheme would involve many stakeholders.

"Industry associations, enterprises, taxi drivers, trade unions and the governments, among which three players are expected to play more important roles, namely trade unions, industry associations and the governments."

Liu believes the involvement of all those players will help reach a reasonable consensus over monthly fees so as to ensure sustainable development of the taxi market.

In response to the plan, many taxi drivers, including Wang, have called for a stronger role for trade unions to better voice their concerns.

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