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Hangzhou plans to scrap taxi fees
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Hangzhou, in east China’s Zhejiang Province, is planning to eliminate taxi franchise fees paid to the government.
With taxi-hailing apps now challenging a long-established cartel in the country’s taxi industry, cab drivers have been feeling the pressure of excessive fees and more competition.
To help drivers earn more, Hangzhou plans to scrap the government’s portion of management fees backdated to January 1.
The new policy will mean an average reduction of 400 yuan (US$63) in fees for taxi drivers, said Lu Xiande, vice chief of the city’s traffic management bureau. The government would also refund nearly 100 million yuan collected so far this year.
Currently, taxi drivers in Hangzhou pay up to 8,000 yuan a month to register with one of the city’s management companies.
Another reform in the guideline will allow drivers to purchase their vehicles, which previously they had rented.
The move will reduce interest groups in management, improve drivers’ incomes and pave the way for market-oriented reforms, said Zhang Xiaodong, vice chief of the city’s road transport administration.
The city will also establish two state-owned companies to provide management services to individually-owned cabs, according to the guideline.
China’s taxi management system centers around a select number of companies known for levying exorbitant operation fees, which are blamed for low morale among cab drivers, resulting in poor service.
The emergence of taxi-hailing apps has challenged the current system, allowing customers to access a larger pool of private vehicles that boast better service and lower prices. But the competition has increased pressure on cab drivers, leading to protests in some cities.
In response, several Chinese cities have pledged to reduce franchise fees.
In May, Yiwu, also in Zhejiang, said it would gradually remove the taxi license quota, which is blamed for exacerbating the scarcity of cabs.
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