Government’s taxi reforms unlikely to reduce the number of drivers’ strikes and protests just yet

06 March 2012

Taxi strikes have become a part of everyday life in China. Almost every week the Chinese media reports on large-scale protests by drivers at high costs, low incomes and unfair competition from unlicensed cab drivers.

The underlying cause of many of these protests is the widely-used contract system (承包制) under which taxi drivers pay a sizable deposit and monthly leasing fees (份儿钱) for the use of the vehicle to the taxi companies. The cab companies can arbitrarily raise the fee, while the driver has to cover the costs of fuel, maintenance and repairs. Drivers are often considered to be self-employed and get few if any employee benefits.

In a long-overdue attempt to deal with the problem, the Ministry of Transport announced at the end of February that China will gradually move away from the current contract system and create a new “employee system” (员工制) in which drivers sign a labour contract with the cab company, much like regular employees in other professions.

The advantages for cab drivers under this proposed system are obvious: Their status as employees will give them greater protection under the law, and should in theory enhance their ability to demand improvements to pay, social security, working conditions and working hours through collective bargaining.

The All-China Federation of Trade Unions (ACFTU), one of the co-sponsors of the initiative, argues that by creating a formal employment relationship between the taxi companies and their employees, it will make it easier for it to establish trade unions within cab companies and set up a system of collective wage negotiations, in line with the model currently employed in unionized factories, offices and service industries across China.

However, the ACFTU’s track record of negotiating decent pay increases for factory workers and other formal employees has not been particularly impressive, and the union’s history with cab drivers in particular has been even worse. Up until the last few years, local trade union federations resolutely refused to grant drivers’ requests to set up a trade union on the grounds that such a union could only exist within the confines of an enterprise. The union’s attitude began to shift slightly after a massive taxi strike in Chongqing in 2008 elicited a sympathetic response from the Bo Xilai government at the time. Ten days after the strike, the ACFTU issued a six point proposal to resolve taxi drivers’ woes, which included plans to unionize the industry. So far, however, taxi drivers have not been listening to the ACFTU, and have continued to take matters into their own hands by staging strikes and blocking highways in cities across China.

Another point to bear in mind is that, according to the taxi companies in the capital Beijing at least, an employee system is already in place. The Beijing News talked to several taxi companies after the proposed changes were announced and they all claimed that their drivers had signed labour contracts and were entitled to certain employee benefits.

The drivers, needless to say, saw the matter differently. Many pointed out that even though they had a labour contract with the company, they still had to sign a leasing agreement and pay fees every month. One driver Zhang Jian, pointed out that if drivers really had employee status they would be in the same position as his college educated son who had just entered the workforce and enjoyed such basic benefits as, “the company pays a salary. Work hours are regular. Overtime work equals overtime pay.”

These conditions obviously do not apply to taxi drivers, who have to work incredibly long hours, 24 hour shifts in some cases, and whose income is dependent on the fares they pick up and the expenses they incur during the working day. “At least for now, we’re more contractors than we are employees,” Zhang told The Beijing News.

While it is highly unlikely that taxi drivers will ever end up working eight hours a day, five days a week, for a fixed salary, drivers do want more time off. A six day week would be a start, they say, but as the Beijing News explained:

Taxi drivers admit that while taxi companies don’t force them to work 24/7, drivers often have no choice. ‘Gas money and taxi-leasing fees force us to do so. We don’t dare take a rest.’ Beijing taxi companies have adopted a two-shift system, whereby two drivers share the use of a single taxi, with one driver working on odd-numbered days, and the other working on even-numbered days. After a 24 hour shift work, the driver returns home to sleep, at which point the other driver will take over. ‘My shift-partner and I each spend 3,300 yuan per month on our taxi-leasing fee. Since we each drive for 15 days per month, our leasing fee is about 220 yuan per day. If we absolutely kill ourselves everyday trying to get fares, we can earn up to 4,000 yuan per month.’

‘If I take off one day per week, at four days per month, I need to pay 880 yuan in taxi-leasing fees for the days that I was resting. If you also deduct the 300 yuan per month spent on meals then all that’s leftover is 2,880 yuan. So, it’s not that I don’t want to rest, it’s simply that I can’t afford to rest.’

It is clear that the low pay and onerous working conditions taxi drivers have to endure are not simply the result of exploitation by the taxi companies, although this is obviously a major factor. Just as important is the role of the government in regulating fuel prices, setting rates for flag-fall and charges per kilometre travelled, as well as issuing taxi licences and clamping down on unlicensed cabs. These are the issues that really determine the income drivers can earn and the hours they have to work in order to do so.

Improving drivers’ legal standing, in terms of their relationship with their employer, and enhancing their ability to collectively negotiate and bargain with that employer is obviously a good first step. But it is only a first step. There is a limit to what can be achieved in negotiations between employers and employees when so many variables are beyond their control.

Ideally, local governments need to establish a system of tripartite negotiations between drivers, the cab companies and the transport department to discuss all the issues of concern for each party and attempt to arrive at an agreement acceptable to all. For this system to work however, the drivers will need to be represented by individuals who really understand the fundamental issues affecting drivers’ work and livelihood. Moreover, these representatives need to understand how strongly drivers feel about specific issues and must be determined to stand with them and argue for them in negotiations.

It is highly unlikely that the trade union in its current form will be able to perform this role. However, over the last four years, taxi drivers themselves have clearly demonstrated their ability to organize protest actions and articulate demands directed both at the cab companies and the local government. And in many cases, strike leaders have been willing to sit down with the authorities and discuss the issues at hand.

The question is now whether or not the taxi companies and local governments are willing to accept those drivers as equal partners in negotiations on the future of the taxi industry in China.

Back to Top

This website uses cookies that collect information about your computer.

Please see CLB's privacy policy to understand exactly what data is collected from our website visitors and newsletter subscribers, how it is used and how to contact us if you have any concerns over the use of your data.