Opening of taxi market key to remove obstacles

By Zhang Haizhou in Chongqing and Lan Tian in Beijing (China Daily)
Updated: 2008-11-12 09:35

Taxi companies in the country operate through franchises and without open market competition, said Yu Hui, a researcher with the Chinese Academy of Social Sciences.

In most cities, those who want to drive a taxi legally have to join a cab company to get a license and must agree to pay "hefty" fees to the management, Yu said.

A problem in the industry is the income disparity between the cabbies and the heads of their companies.

"In Beijing, a taxi driver can earn only 2,000 yuan ($293) after paying 5,000 to 6,000 yuan of fees to their companies each month," Yu said.

In contrast, the monthly income of the bosses of some cab companies could reach 20,000 yuan, Yu said.

Since the authorities approve the franchises, Yu claimed that a number of officials and their relatives have "heavy stakes" in taxi companies.

Cab companies should therefore make public their financial statements, including profits, Yu said.

"But the current problems can only be solved when the government abolishes the franchising system," Yu said.

Apart from the system, Yu said cities also have to crack down harder on illegal taxi operations.

Taxi drivers on strike in Sanya, Hainan province, pointed to the local authorities' inability to stop 700 illegal taxis from operating. The city has 1,200 licensed cabs.

The protest by more than 8,000 taxi drivers in Chongqing last week was also said to be partly caused by the increasing number of unlicensed cabbies. The city reportedly cracked down on illegal taxis over the weekend.

Establishing unions for tax drivers can also serve as a long-term solution to cabbies' problems with their companies, said Zhou Changxiang, a professor with the department of social work at Chongqing Technology and Business University.

The strike in Chongqing showed the lack of an effective platform for them to express their views.

"Taxi drivers would not resort to such extreme means if they have a platform for communicating with management," Zhou told China Daily.