Mon, July 30, 2012
Trouble catching a cab? It's not just foreigners. What's the deal? Blogs
'We barely make any money. I just do it as something to keep me busy.’ So says Mr Zuo, a driver in his sixties. Taxis – or rather, a lack of them – are the talk of the town. Eavesdrop on a street corner and you’re sure to hear someone complaining about the long wait for a ride home.
Foreigners sometimes think the distinctive yellow-striped Hyundai Elantras aren’t stopping for them, but an April poll by Sina found that 94 percent of Chinese respondents had the same issue.
‘The biggest complaint about taxis is that some drivers refuse to pick up customers,’ admits middle-aged driver Mr Cai. ‘You can’t blame them... If you drive from Sanlitun in the early morning, for example, to somewhere far in the south, you get 70RMB one-way, but come back without any passenger, thus losing at least 25RMB in petrol. It’s like you spent half the night earning just 20RMB.’
But the problem goes deeper than lost fares. ‘We just feel the company is charging far too much,’ complains Mr Zuo. Drivers typically pay companies around 3,000RMB a month; each taxi is operated by around two drivers and there’s little choice but to pay up. ‘So many people want to be drivers,’ explains Mr Cai. ‘If you don’t do it, others will. The core problem is that the oil price is too high.’
The government currently offers a 300RMB monthly fuel subsidy, but that hasn’t stopped dissatisfaction. Matters nearly came to a head in late February, with rumours of a strike. Unlike in other cities, that didn’t occur here. Instead, a meeting to discuss ‘harmonious labour relations’ saw a promise of sweeping reforms in March, including one paid day off per week, as well as less punitive pensions and contracts.
As July approaches, there has been no further mention of these reforms. But in mid-May, to help keep infl ation at bay, China cut its well-regulated pump prices – previously higher than in the US – putting petrol at 27RMB and diesel at 28RMB a gallon. This might provide relief but investment bank Macquarie estimates fares will need to rise by 20-30 percent to achieve true parity.
Economist Mao Yushi says there is an impasse between the government’s wish to both satisfy the public and provide a practical solution for drivers. 'The government intends to please citizens, but harms instead,' says Mao. 'They might know it’s good to raise the fare but, in trying to please people, they do it like this.'
Go back a decade and driving was aspirational work, offering good money to those who wanted it; traffic was mostly bicycles and the majority of drivers could afford a post-lunch snooze.
Fast-forward ten years and that ride is still pegged the same: 10RMB (11 after 11pm) for the first three kilometres. Since 2006, the cost beyond that has increased from 1.6 to 2RMB per kilometre, while the rest of the Chinese economy has moved much faster: annual inflation averaged about 4.25 percent throughout this period. Today, the post-prandial siestas are an unaffordable luxury: ‘If you take a rest, you can’t get your money for the day,’ 58-year-old driver Liu says.
‘Setting the taxi fare is a very complicated question,’ admits Mao, who was awarded the 2012 Milton Friedman Prize for Advancing Liberty from the Cato Institute in the US in May. ‘It is better to gather economists, the government and taxi drivers together for a study.’
In comparison with Shanghai, though, Beijingers have it somewhat easier. With about 40,000 taxis on the streets compared to Beijing’s 66,000, the odds might favour the Shanghai cabbies, but while the flag-fall price is 14RMB, the cost of living in Shanghai is roughly 20 percent higher. Shanghai’s 100,000 drivers have to pay around 650RMB and work between 16 and 20 hours a day to cover costs – compared to 13-hour days in the capital, according to a survey by Beijing Traffi c Radio.
‘A good solution could be to allow drivers to organise a union and gather their opinions for collective bargaining,’ suggests Mao. Unions in China tend to be limited to organising outings and explaining government policy, rather than representing workers’ rights, but there are signs that this is changing. 'The solution is to foster [private sector] competition; there is no other way,' concludes Mao. 'Everything would be solved by having competition.'
Such a practical solution still seems way off; in the meantime, though, not every driver is so bothered. ‘If you’re clever, you just go to some “hot” places,’ laid-back Mr Cai smiles. ‘Sometimes I allow several people going to the same place, like Sanyuanqiao or the airport, in at the same time. That’s how I can earn around 1,000 kuai a day – not bad, right?’
Robert Foyle Hunwick
