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Shenzhen mulls tying cab license fees to income

2015-February-27       Source: Szdaily.com

Shenzhen Municipal Transportation Commission is considering changing the rule regarding management of the cab industry by linking the amount of money drivers have to pay taxi companies each month for the use of cab licenses to their incomes and social and economic development level, according to a report Southern Metropolis Daily published recently.

Shenzhen Municipal Transportation Commission is considering changing the rule regarding management of the cab industry by linking the amount of money drivers have to pay taxi companies each month for the use of cab licenses to their incomes and social and economic development level, according to a report Southern Metropolis Daily published recently.

In a letter responding to the suggestions of Chen Jie, a deputy to Shenzhen Municipal People’s Congress, the commission said it will conduct research on the regulations to improve the monthly payment mechanism by establishing a reasonable and fair profit-sharing mechanism between taxi companies and drivers.

The lawmaker, Chen, suggested that the government cancel the monthly fixed-rate mechanism and allow the market to decide profit sharing between taxi companies and drivers with the prerequisite of ensuring basic income on both sides.

Chen also suggested the government delimit restrictions on red and green cabs and solve the other problems facing the city’s cab industry.

Taxis painted red are referred to as red cabs. These taxis are allowed to pick up passengers citywide, while green cabs are restricted to the former non-SEZ locations, which are Bao’an and Longgang districts and Guangming, Pingshan, Dapeng and Longhua new areas.

The cab industry runs a monopoly in the city and private taxi-hailing apps have been banned. Taxi companies charge a monthly rent of 8,000 to 10,000 yuan per taxi for a license.

The regulation, which was revised and passed in June 2004, authorized the government to decide the amount of monthly rent that drivers had to pay to taxi companies. But many fee-related disputes have arisen and continue to arise from the regulation’s inability to meet the development of the current market.

The average income of cab drivers in the city has dropped, and competition has become fierce with the wide use of mobile phone apps allowing passengers to book unlicensed cars online. Illegal taxis are also rampant.

Cab drivers say it’s impossible to lower fares to compete with unlicensed taxi drivers because their monthly rent to taxi companies is so high.

Taxi drivers went on strike in Chengdu, Changchun, Jinan, Nanjing and Shenyang in January.

The Ministry of Transport said last month that it would take steps to protect the rights and livelihoods of taxi drivers in the wake of the strikes.

People’s Daily warned last month that the increased use of ride-hailing apps would force changes in the industry.

“The current monopoly has long been criticized and the large amount of money that must be paid to taxi companies for licenses will have to be gradually reduced,” read the newspaper’s report.

Shenzhen now has around 16,000 cabs and around 36,000 drivers. Taxi companies offer monthly subsidies of between 250 and 750 yuan to each green cab driver to ensure they earn at least 4,000 yuan a month. Red taxi drivers, however, have no subsidies from their companies.

 

Editor: 王凯

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