Beijing raises taxi fares to bring order in chaotic market
Staff Reporter 2013-06-11 11:13
A taxi rank outside the Beijing West Railway Station. (Photo/Xinhua)
Beijing has decided to raise taxi fares for the first time since 2006 to boost the income of the city's cab drivers after complaints that it has become increasingly difficult to hail a cab in the capital, Guangzhou's Southern Weekly reports.
However, many people in the government, taxi companies and the general public, who have been dissatisfied with the city's chaotic taxi market over the past two decades, are not optimistic that the price hike will produce the intended results, the paper said.
The city government held a public hearing on May 23 to discuss two proposed sets of price hikes and other related issues. During the hearing, only one person out of the 23 consumer representatives present cast a vote against the price hikes, suggesting that the membership fees taxi drivers must pay to taxi companies should be cut instead.
Official figures conveyed at the hearing showed that last year the monthly income of taxi drivers who hired their vehicles was around 4,500 yuan (US$730), and that the income of cabbies registered a year-on-year growth of 5% between 2006 and 2012, with the income level and the growth rate still lower than the national average.
The hearing reflected the government's attempts to encourage taxi drivers to voice and address public complaints about the difficulty of flagging a taxi in Beijing. After the hearing, several drivers were pessimistic about the prospective price hike and said that they would prefer taxi companies to cut their high membership fees.
Taxi companies were also dissatisfied with the price hike. "Over the past 20 years, our profits have been on the decline," said Han Jin, the head of a taxi company which owns more than 200 cabs, adding that many incentives for taxi companies have already been cut.
The government has spent 720 million yuan (US$117 million) a year to subsidize the industry, but is blamed by many for neglecting its duty and establishing an ineffective system, the paper said.
The development of the city's taxi market has become distorted over the past 20 years, characterized by wild growth and strict and comprehensive government control, according to the report.
The number of taxi companies in the city has peaked in recent years at 1,485 and the number of taxis at nearly 70,000, while the government has also granted licenses to 1,000 individual operators. This has resulted in fierce competition, leading many in the industry to a call for government regulation.
In an attempt to manage the situation, city authorities have imposed strict controls on the industry from 1994, they also raised prices in 1998 and then again in 2006. But industry insiders said the two time price hikes were lower than the levels existing in similar cities, including Shanghai and Shenzhen.
However, due to stringent government control of the industry, an underground taxi market has surfaced. Figures showed that in 2005, the number of black taxi cabs — referring to unlicensed cars — touched 72,000, far greater in number than registered taxis, the Southern Weekly said.
