Policymakers address growing vehicle demand, pollution worries

Editor's Note

With the increasing need for vehicles and growing awareness of environmental protection, China is faced with the problem of improving transport efficiency while controlling auto emissions. The problem of how to strike this balance will be addressed at the ongoing annual legislative and political consultative sessions. The Global Times discusses three key concerns in China's auto industry. [Special coverage]

Taxi industry reform

Li Shufu, a member of the Chinese People's Political Consultative Conference and chairman of auto manufacturer Geely Holding Group, raised a proposal on reforms of the taxi industry after submitting similar proposals in 2013 and 2014, according to a post on Geely's Sina Weibo released on Monday.

The traditional monopoly of the taxi industry should be broken and the market allowed to lead the sector, Li said in his proposal.

It will be hard to change the franchise model seen in the taxi industry since large financial interests are involved, Zhao Zhanling, a legal counsel with the Beijing-based Internet Society of China, told the Global Times on Tuesday.

In China, local governments decide the number of taxis that are allowed to operate in a city and governments distribute taxi licenses to local companies but not to individuals, Zhao said.

Taxi drivers then have to pay a monthly franchise fee to the taxi companies that employ them.

Beijing-based newspaper Beijing Morning Post reported on January 15 that the average monthly franchise charge per car is about 6,200 yuan ($991) in Beijing.

Under pressure from this high franchising fee, some taxi drivers only choose passengers that can maximize their profits, leading to complaints about taxi services.

Recently unsatisfied passengers have turned to car-hailing services, which are ruled by ambiguous regulations in China.

With better services and only slightly higher charges than taxis, car-hailing services are forcing the taxi industry to make changes, Zhao said.

The franchise fee and new competitors have pushed taxi drivers to take actions. Thousands of taxi drivers in Shenyang, capital city of Northeast China's Liaoning Province, went on strike on January 4.

Similar strikes also followed in other cities afterward.

Li suggested breaking the taxi companies' monopoly of taxi licenses and allowing taxi drivers to apply for the license directly from the government.

Meanwhile, the number of taxis should be decided by market demand rather than the government, according to his proposal.

Opening up the taxi industry to free competition will greatly increase the efficiency of taxis as a public transport tool, which is essential to Chinese cities, according to Zhao.

Yang Chuantang, minister of Transport, told reporters during the ongoing two sessions that guidelines for taxi industry reform are expected to be released in the first half of 2015 without revealing further details, the Xinhua News Agency reported on Thursday.