High rental fees discourage taxi drivers

With around 66,000 registered taxis, Beijing has the most cabs in the world. Cities like New York and Tokyo have around 15,000. Yet, getting a taxi during rush hour in the Chinese capital is no easy thing. Many taxi drivers in the city say no to rush hour business, leaving pedestrians around the capital frantically competing for a free cab.

Meng Han'guang was proud to be a taxi driver 30 years ago.

Meng Hanguang, taxi driver, said, "I earned 3 thousand yuan a month. That was quite good at that time."

But his income has increased very little in the past couple of decades.

Meng said, "The price of everything has been increasing, and our income hasn't increased in parallel with that."

Meng works on a contract with the Shouqi taxi company.

Every month, he pays the company over 5,000 yuan in rental fees, a huge burden for many taxi drivers. And he has to work for around 12 hours everyday if he wants to see 3 to 4 thousand yuan left in earings at end of a month. Many like him have quit their job, which has left even less taxis on the city's roads during rush hour traffic.

To solve the problem, Beijing has announced an increase in taxi fares starting from June. Officials say the increased income should go to the taxi drivers themselves.

Li Xiaosong, Spokesman of Beijing Traffic Committee, said, "The new measure aims to encourage taxi drivers to work during rush hour."

Li says taxi companies should not be allowed to hike their vehicle rental fees. But taxi companies are concerned. The rental fee doesn't all go into their own profits. Every month, about 500 yuan goes toward fuel subsidy and around 700 yuan covers the drivers' social insurance each month. Another 1,430 yuan goes on vehicle maintenance costs. The remaining 2,400 covers the management costs of the taxi company, income tax and profits.

Gao Xiang, Spokesman of Shouqi taxi company, said, "The rental fee is set by the government and has never changed. Our profits are going to be squeezed by the rising costs."

The price is certainly affecting the general public. Beijing authorities believe an intervention in taxi fares could make it easer for people to get a taxi in this city. But there are others who suggest that a more competitive market would solve the problem more effectively.