Li Hao (pseudonym), an official at the transport department in Jiangsu, finds it difficult to identify unlicensed taxis on the road amid a boom in Net-based taxi-hailing apps in the Chinese market.
"We feel it is more difficult to identify illegal operations, because more and more private car owners are using taxi-hailing apps while pretending to be licensed cars for hire," Li told the Global Times. He said that previously most of the cars doing this were high end, but now normal or even low-end cars are joining in.
In 2014, several car rental and software companies launched Zhuanche, a car-for-hire service which targets the middle and higher end of the taxi market, allowing passengers to hire cars other than taxis.
The success of Zhuanche and companies offering similar services led to a series of protests by taxi drivers across China, triggering public debate as to whether the industry should be made more market-oriented, and how taxi and car-hailing mobile apps should be regulated.
In January, the Ministry of Transport started banning private cars from taking passengers for profit using the apps, while calling the Zhuanche service an "innovative and positive" concept to meet market demands.
The signal stimulated a boom for the Zhuanche service. However, this leeway has been taken advantage of by many private owners.
"We are in a dilemma because there is no law on the Zhuanche service. We do not know how to crack down on illegal Zhuanche services, how to supervise the taxi-hailing platforms and how to guarantee the safety of the newly emerged service," said Li.
Zhuanche or private cars
"Most car-hailing apps are cooperating with private owners and 90 percent of Zhuanche vehicles in operation are private cars," a Guangzhou-based Zhuanche driver surnamed Xie told the Global Times on Tuesday.
"Some software and car-rental companies do not strictly check the drivers' qualifications, allowing private car owners to use the app," a Jiangsu-based car rental company owner surnamed Yin told the Global Times.
Xie said that some private owners claimed that they have signed contracts with car rental companies. However the car, which is unlicensed, still belongs to them.
In China, local governments decide the number of taxis that are allowed to operate in a city and distribute a certain number of taxi licenses to local companies. Taxi drivers then pay franchise fees to their companies.
Unlicensed private cars are prohibited in China from offering taxi services, but booming market demand has fueled the popularity of those illegal service providers.
"It solves the long-existing problem of it being difficult to find a taxi. Zhuanche is very clean and its service quite cheap. Zhuanche drivers are polite. Actually I do not care about whether their services are illegal," said a Beijing resident surnamed Jiang.
According to Xie, some Zhuanche drivers used to be taxi drivers, who were forced to change their job for a living. Some lead an average life and want to earn more money. Other drivers just want someone to talk to, or to make friends or seek possible business clients.
Forming an alliance
Xie, apparently, knows that his service is illegal. However, he seemed to not worry about it.
"Law enforcement officers need sufficient evidence. Although passengers admitted that they did not know me and hired my car through taxi-hailing apps, I would say that I did not get any money and the passengers paid the platform, not me," said Xie. "Could not I just do something good like Lei Feng?"
While enjoying high subsidies provided by taxi-hailing apps, some Zhuanche drivers claimed that they have been ensnared by law enforcement officers posing as customers and using the apps.
Zhuanche drivers in several cities including Guangzhou in Guangdong Province, Hangzhou in Zhejiang Province and Wuhan in Hubei Province gathered on the street, expressing their rage over an entrapment scheme by local transport departments last week.
When one Zhuanche driver was investigated under suspicion of illegal operation, large numbers of Zhuanche drivers quickly came to the scene to support him, leading to heavy traffic jam.
"Zhuanche drivers seem to have formed an alliance," said Li.
"I understand that the government should do something to punish the illegal providers. However, once they did, the action would raise public anger, even trigger riots. The central government either shuts down the apps and bans the Zhuanche service, or legalizes the service and implements strict supervision," said Xie.
Uber, a U.S.-based car services firm, responded to the demonstration in a message sent to its Zhuanche drivers, saying, "The company forbids any of its drivers from participating in protests, otherwise it will terminate the contract."
Road to the future
"Cracking down on unlicensed drivers is legal but there is currently no law governing app service providers, who offer an information service," said Zhao Zhanling, an Internet law expert, explaining why the crackdowns are currently confined to unlicensed individuals and companies.
However, whether Zhuanche is legal remains a problem. Beijing transport authorities recently said that the cooperation between software and car-rental companies is also illegal, Zhao told the Global Times.
"Authorities have the right to investigate illegal service providers. But entrapment should not be encouraged as it might result in possible blackmail and conflicts with the public," said Gu Dasong, an associate professor of transportation law at Southeast University.
Currently, the central government needs to enact laws or regulations to regulate the Zhuanche market, said Gu, suggesting that private cars be better utilized to meet the demand for public transportation.
Gu added that this move is also necessary for protecting passengers' rights. "Passengers using private car owners' service could not get compensation from insurance companies even though the car owner has bought insurance, because they run an illegal operation."
A Guangzhou-based taxi driver summed up the situation by saying, "We also hope the government issues a policy soon. Now the taxi rental companies showed unprecedented respect to us by pleading with us to work for them or introduce our friends to become taxi drivers."
