Taxi drivers still waiting for industry reform

(Ecns.cn)--The Ministry of Transport, the Ministry of Human Resources and Social Security (MHRSS) and the All China Federation of Trade Unions (ACFTU) held a videoconference late last month seeking thorough reforms of the taxi industry to improve labor relations and better protect drivers' rights.

"More than half of the disputes in the taxi industry in recent years were related to poor labor relations, unreasonable contract fees (that drivers pay employers) and insufficient protection of drivers' rights," China Daily quoted Feng Zhenglin, deputy transport minister.

Yang Zhiming, deputy minister of the MHRSS, added that many taxi firms do not sign contracts with drivers, who usually work long hours but earn small salaries.

Yet less than 70 percent of taxi drivers joined a trade union organization, revealed Wang Ruisheng, general secretary of the ACFTU.

A survey of taxis in some key cities by the Development Research Center of the State Council showed that an average of 1.2 mass incidents, including strikes against unreasonably high contract fees and illegal cabs, occurred every month from 2004 to 2009.

"Taxi drivers in many places have been complaining about being overcharged for contract fees, which has led to strikes in places such as Chongqing and Hainan in the past several years," Feng Xiliang, a labor expert at the Beijing-based Capital University of Economics and Business, told the China Daily.

"The strikes have seriously affected local transportation and grabbed the attention of related government departments," Su Hainan, deputy head of the China Association for Labor Studies, told China Newsweek, adding that now is the time to solve these problems.

According to the People's Daily, there are more than 8,700 taxi corporations, about 1 million taxis and more than 2 million cab drivers in China.

In general, taxi firms lease a car to one or two drivers on monthly contracts. But in many small and medium-sized cities, contracts between drivers and employers are lacking, Feng Xiliang pointed out.

Mr. Li, a manager of the Minda Taxi Service in Jiangjin, Chongqing, told China Daily that his firm owns 93 taxis, and that normally two drivers take a turn at the wheel of each car every day.

Li added that his company contracts the operation rights to one driver, who has to find another one to jointly run the cab.

However, "we don't sign a contract with the second driver, and this is a common practice in the industry," he said.

Li welcomes the government's plan to regulate employment contracts and believes it will help address the frequent turnover of drivers. "But I'm afraid it would increase our costs," he noted.

At this, Yang Zhiming explained that they would design a contract convenient to both parties.

According to Feng Zhenglin, a more scientific management system of taxi firms and cab drivers will be adopted; drivers can negotiate contract fees, social security and days off with employers; and work conditions will be improved to provide greater convenience for drivers to park or stop for meals.

Moreover, a correlated price fixing mechanism between the fluctuation of fuel costs and the adjustment of taxicab fares should be established, and "employers should sign labor contracts with all drivers, and we would calculate the cost of operating a taxi and urge companies to set reasonable contract fees," Feng added.

Yet Dou Keying, a Beijing taxi driver, said he won't pin his hopes on the proposals.

"Calls for reform of the taxi business have never stopped for the past 10 years, but strangely nothing has changed at all," he told China Daily.

Ren Lingyun, a visiting research fellow at the Rural Development Research Institute of Hunan who specializes in conflicts in the taxi business, told the newspaper that the drivers' voices may not be heard in the negotiations.

"The root cause (of the conflicts) has not been touched," he said.

In most cities, including Beijing, local governments grant licenses to taxi companies only through auctions. The limited number of licenses makes them valuable, which allows companies to either resell the operating rights to an individual at double the price or lease a taxi to drivers for high fees, Ren further explained.

In a few other cities, such as Wenzhou in Zhejiang Province, the local government auctions licenses to individuals, "but the number is still limited, and it's the government, not the market, that decides the number of taxis a city should own, and that causes the scarcity," he added.

"Taxi companies in the country operate under the protection of local governments. They face no open market competition, and this situation hasn't changed much in the past decade, despite all the problems that are so widely known," Yu Hui, a researcher with the Chinese Academy of Social Sciences, said during an interview with China Daily.

The newspaper pointed out that to most experts, the solution to the taxi industry's problems is simple: open the industry to the free market.

Xinxiang, a city in Henan province, has set an example for reform of the taxi industry by allowing individuals to bypass the taxi companies and bid for taxi quotas themselves. They are free to operate independently or under an association which charges every taxi driver a symbolic 500 yuan a year as a service and management fee.

You Chenli, a researcher at the Transition Social & Economic Institute in Beijing, analyzed that with the right standards and thresholds allowing anyone to enter the industry, local governments could change their responsibilities from regulating the number of taxis to ensuring better quality control.

More licenses could also allow illegal taxi drivers to work legally to meet increased demand, You Chenli told China Daily.