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Cab-hailing apps: the squeaking axles of change
It has been half a year since I bought my Mazda Axela, and I have a confession to make.
My odometer reads just under 1,500 kilometers, far below the 5,000 kilometers for my first maintenance servicing this month.
Instead of driving to work and around town on weekdays, I have been using zhuanche, or high-end car-for-hire alternative services to taxis, to get me around. Given the endless traffic congestion and chaotic parking conditions, a newbie driver like me feels more comfortable letting someone more experienced do the driving.
Car-hailing apps like Didi-Kuaidi, Uber, Yidao and Shenzhou have become very popular. Zhuanche is a highly efficient, location-based car-for-hire service. Everything seems above-board and hassle-free. The driver and passenger are connected through a smartphone app, instant booking is made, and fares are decided according to traffic conditions.
As I sit in the back seat thinking about all this, I realize that these seemingly carefree journeys are creating a power struggle between a new sharing economy and old politics.
Zhuanche cars are driven mostly by part-time chauffeurs trying to make maximum use of their self-owned cars. They are legally no different from the heiche, the “black market” taxis that authorities have tried to foil for years. The difference this time is that the “outlaws” dare to stand tall in the open, shaking the taxi system to its core around the world with a great deal of self-righteousness.
Deep-rooted taxi monopolies in many countries have urged these upstarts to be banned to protect their own entrenched self-interest. They are seeking to suppress the insatiable nature of aspirational people in big cities who believe they can do better if they work harder. One obvious area crying for change was the packed and delayed rush-hour subway trains full of frustrated people trying to get to work or back home.
The Internet, with its natural prowess at resource allocation and openness toward competition, is breaking that stranglehold around the world by mobilizing idle and under-utilized private cars to meet that pent-up demand for easier commuting.
Like many of my friends, I call zhuanche more than mainstream taxis now because I have a higher chance of actually getting one. I even thought about becoming a zhuanche driver myself once I am streetwise enough.
Despite its illegal status in China, zhuanche continues to thrive, though not without hiccups. The central government’s clear-cut directive that privately owned cars are not allowed to run businesses echoed through and then trailed off in cities across the country. There have been a few tickets issued to zhuanche drivers and app operators, harsh by case but overall a slap on the wrist.
“Are you worried about getting caught?” My favorite question for zhuanche drivers is always answered with the can-do, political wisdom reminiscent of emboldened local governments during the heyday of economic development. “It is easier to seek forgiveness than permission,” came the inevitable answer.
It evokes the collective memories of the development frenzy in the 1990s, when anything was possible and projects often materialized before official authorization.
In the balancing act between procedural justice and efficiency, the most dangerous thing is indecision. In the case of zhuanche, the ambiguity of law enforcement makes no one feel safe about their own interests. Furious mainstream taxi drivers have attacked zhuanche drivers and blocked roads to vent their anger about lost business. Protests by zhuanche drivers against official sting operations involving controversial entrapment nearly developed into mass disturbances.
Talks about making room for zhuanche under China’s existing legal framework has been growing louder in recent months, with the dynamics of this power struggle changing subtly.
Hefty subsidies for both drivers and passengers from zhuanche operators, sustained by the Internet industry’s remarkable story-telling prowess and fund-raising abilities, have inflated the popularity of zhuanche to an extent that the system has indeed become too big to ban in cities like Shanghai. Any abrupt attempt to take this commuting indulgence away from the public could risk a failure like Prohibition in the US.
Capital keeps greasing the wheels of the digital era, crashing through every established system in its way. In the end, the Internet empowers people, and they will be the ones to decide in the end how they want to get around crowded cities.
If it weren’t for the subsidies, I would find zhuanche too expensive to take, and many zhuanche drivers I know personally would stop taking customers.
Those who look to do serious business said they would be disappointed to have their incomes drop. Those who enjoy getting a “snapchat” experience with their passengers said they would feel less motivated to continue.
They all have something to lose, though it must be said they wouldn’t be sitting so pretty if app operators had not chosen to sacrifice profits in order to build up the market first.
The operators have refrained from charging commissions and have even turned a blind eye to many fake rides ordered by drivers themselves to get subsidies. It is so common that almost every zhuanche driver I know has used the ploy. A crackdown on such industry practice, including freezing suspicious accounts, once led to the offices of zhuanche apps being besieged by angry users.
Some affected accounts were unlocked in the end — another shameless win in an under-regulated market.
Power struggles test limits and push boundaries. That’s what a market economy is all about, isn’t it? Everyone looking out for their own interests?
“Being a zhuanche driver is a good motive for you to keep honing your driving skills and learning your way around the city,” said my friend and driving companion Alex, who encourages me to see the non-monetary part of my gain.
He recently signed up to be a part-time Uber driver himself. I suggested that he charge me less whenever he drives me home to earn some subsidies.
A friend helping a friend. That’s as honest and selfless as I can get.
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