China regulators promise taxi industry shakeup

By Joe McDonald, AP

BEIJING–Regulators are promising changes in China’s taxi industry following strikes by drivers in at least seven major cities over complaints about low pay, high charges imposed by taxi companies and competition from ride-hailing apps.

The government-run China News Service on Thursday cited experts who said taxi companies, many of them monopolies, were hurting drivers by charging fees of up to 9,000 yuan (US$1,450) per month for use of a cab. The report appeared on websites of numerous Chinese news outlets.

The official Xinhua News Agency, in a one-sentence report on its microblog, cited the Ministry of Transport as promising a ��breakthrough�� in creating a ��modern transportation industry�� but gave no details of possible changes.

Strikes have been reported in major cities including Nanjing in the east, Chengdu in the west and Shenyang in the northeast.

Drivers cited by Chinese media also complained about competition from ride-hailing apps such as Uber that are used by private drivers. The Ministry of Transport announced last week drivers of private cars would be barred from offering services through such apps as a safety measure.

China taxi drivers have protested repeatedly in recent years over conditions in their industry. Most drivers are treated as independent contractors without salary or other benefits. They have no bargaining power with taxi companies that are allowed to set their own rates for what drivers must pay for use of a cab.

��While cab drivers are undoubtedly unhappy about the use of taxi apps, their fundamental grievance is and always has been with the cab companies and the contract system,�� said Geoffrey Crothall of China Labour Bulletin, a Hong Kong-based group that researches Chinese labor issues, in a report this week.

After deducting charges to taxi companies, many drivers make less than a factory worker, according to Crothall.

��With earnings so low, drivers understandably get angry when their business is poached by unlicensed cabs that are not subject to same burdensome regulations as they are,�� he said.

The Communist Party newspaper People’s Daily warned on Jan. 6 that rising use of ride-hailing apps would force changes in the industry.

��The current monopoly has long been criticized,�� the newspaper said. ��The large amount of money that must be handed to taxi companies will have to be gradually reduced.��