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April 13, 2010

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City to resume rental-car plates

THE city's transport watchdog plans to resume issuing plates for rental cars around the end of this year to try to keep up with the growth of unregulated rental vehicles in Shanghai.

Shanghai stopped issuing special plates for rental cars in 2008. City law requires the plates for rental cars, which begin with a capital "Y," just as it requires dedicated plates for taxis.

Since the suspension, the cost of getting an already-issued Y plate in Shanghai has soared to more than 100,000 yuan (US$14,648) now, a manager, surnamed Zhai, who operates a local car service and renting company, told Shanghai Daily yesterday.

Rather than pay the fee, many rental car businesses are simply ignoring the law, insiders said. By now, the number of existing Y plates is tiny compared with the many vehicles being rented by companies citywide, Zhai said.

"Sometimes a licensed car service company has to wait for two months before they could get such a plate," Zhai said.

"Because of the tight supply, the companies have to follow a quota system to get these plates."

The first licensed car-renting company opened in Shanghai in 1992. Currently, there are 40 licensed companies operating 9,100 rental vehicles with authorized plates.

But in fact there are no fewer than 200 companies offering car rental services in Shanghai, said sources from inside the industry.

Many of the companies have a legal business license for "car related service."

But most of the cars they use bear private-vehicle plates instead of the Y plate, meaning they are operating outside the view of the taxi-industry watchdog.

The transport authorities said they are now revising the city's taxi vehicle management rules to set up a special regulation on supervising rental cars.

Plates for rental vehicles will open for bidding again around the end of the year.

The authorities quit issuing Y plates after the economic turndown caused the car rental business to shrink rapidly in 2008.

But the local market has bounced back vigorously since then.

However, insiders question how many of the companies, especially the smaller operators, will actually pay to bid for new Y plates if they are operating just fine as they are with their private-plate vehicles on the street.


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