Strikes trigger search for a long-term solution to China’s taxi industry woes

A significant feature of this month’s taxi strikes has been the swift and generally conciliatory response of the local government. Strikes and protests in Chongqing, Hainan, Gansu, Yunnan and Jiangxi have all been defused by promises of government action.

A potentially costly strike in Shenzhen was forestalled last week when the transport authorities announced that monthly rental fees would be reduced by up to 1,000 yuan. And in Shantou, over a thousand protesting drivers returned to work after deputy mayor, Su Yaoguang, promised to investigate drivers’ claims that local officials were allowing unlicensed cab drivers to operate in the city in return for bribes.

However, as commentators in the official Chinese media have pointed out, high-level government intervention in the taxi strikes has only provided temporary respite, short-term intervention cannot provide a lasting solution to the entrenched problems of excessive fees, high fuel costs and competition from unlicensed cabs.

Both the central government and the official trade union now realize the need for a long-term solution. The All-China Federation of Trade Unions (ACFTU), in a notice issued on 14 November, urged the establishment of unions within taxi companies which could represent drivers’ interests through the collective contracts system. While on 20 November, the People’s Daily promoted a taxi management system, which had been operating successfully in the Henan city of Xinxiang for nearly ten years, as model for the rest of the country to follow.

While the ACFTU’s initiative is welcome, there is a danger that once again it will focus more on meeting quotas for setting up enterprise unions than on ensuring that those unions actually represent and defend workers’ rights and interests. Indeed, the Chongqing Federation has already stated that it intends to establish trade unions in all of the city’s 155 taxi companies by the end of November. For these unions to be effective, however, the officials must be democratically elected by the drivers, and forcefully represent their demands on pay and working conditions. Currently, taxi company unions are largely ineffective, being under the control or sway of management.

Meanwhile, the “Xinxiang model” promoted by the People’s Daily seems to by-pass the trade union and focus on the individual rights of drivers. In Xinxiang, drivers bid at an annual government auction for a limited number of eight-year operating licenses at an average cost currently of around 100,000 yuan. Drivers can operate independently or, for a 500 yuan annual fee, join a taxi service company that provides a GPS system and assistance with tax and insurance.

According to the People’s Daily, most drivers are happy with the fares set by the local government and can make several thousand yuan a month, easily enough to recover their costs. However, Xinxiang is a relatively small city of one million residents, and there is no guarantee that such a system would work effectively on a larger scale. There would have to be a wide range of checks and balances to ensure that taxi companies did not deliberately overbid to buy up large numbers of licenses which it could then sell on to individual drivers at exorbitant rates. Without intense scrutiny, the system would still be open to the kind of official corruption that dogs the taxi industry across the rest of the country.

What ever management system is in place, drivers will always need protection from unscrupulous operators, and the best way to provide that protection is through the establishment of grassroots trade unions that have the power and authority to represent workers’ demands in fair and equal negotiations with management.

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