By Yu Han (余寒)
Issue 613, April 1, 2013
News, page 05
Translated by Yu Menglu
Original article: [Chinese]

In 2006, Beijing adjusted taxi prices to 2 yuan per kilometer. Despite the fact that oil prices have increased by nearly 70 percent since then, this policy hasn’t been adjusted.

In response to overwhelming complaints from the taxi business, the Transport Department has been attempting to make up the difference by adjusting fuel surcharges and subsidies.

After fierce haggling, the fuel surcharge settled at three yuan in March - a substantial increase from the initial one yuan. Fuel subsidies have remained at 1,305 yuan per month since its last one-off rise by 525 yuan.

Many taxi drivers refuse to work during the morning and evening peak hours because oil prices are so high that the drivers don’t make a profit - or even lose money - by driving during these periods. They also have to work longer hours to offset skyrocketing oil prices, which have nearly doubled.

Mr. Li, who has been driving a taxi for 10 years, told the EO that he had to work at least ten hours a day to earn 4,000 yuan per month after handing in a monthly 5,175 yuan fee to his taxi company. Fuel subsidies, shared by the government and the taxi companies, are deducted from his earnings as part of this monthly fee. Without the fuel subsidy, he would only have to hand in 3,870 yuan a month.

Mr. Ma, a manager from Yin Jian Group (银建集团), believes the government should raise taxi prices to increase drivers’ income.

However, most taxi drivers think that raising taxi prices wouldn’t help them because once the price rises, subsidies would disappear, which is equivalent to a raise in monthly fees. If oil prices are shouldered by the customers, drivers’ income won’t rise.

While this policy wouldn’t help the taxi drivers, taxi companies would save 520 yuan per taxi per month.

In 2004, the State Council issued a notification saying that increasing costs caused by rising oil prices should be shared by taxi companies, taxi drivers and customers.

Although taxi companies are in favor of an increase in taxi prices, many drivers fear that demand will be reduced. The worst case scenario is that if there’s an increase in taxi prices, both subsidies and customers will disappear.

The number of taxi drivers in Beijing has been decreasing in the past two years. Of the 200,000 taxi driver certifications released, only about 100,000 are being used.

Zhao Hongcai (赵洪才), secretary of the Party Committee of Beijing Urban Design and Research Institute, said that raising taxi prices was the only way to increase taxi drivers’ income.

However, Director of the Economic Research Institute of the National Development and Reform Commission (NDRC) Liu Shujie (刘树杰) is more concerned about high fixed monthly fees.

Guo Yushan (郭玉闪), who researches the taxi industry, says that lifting restrictions on the taxi rental market is the right solution.

The process of altering the price is very complicated and time-consuming. First, the Transportation Administration of the Beijing Municipal Commission of Transport has to submit an application to the Division of Fee Administration of the Beijing Municipal Commission of Development and Reform. After approval, a hearing will be held to discuss the necessity and feasibility of the plan. Then, the Beijing Reform and Development Commission will improve proposals from the hearing and make the final decision.

The hearing for taxi price adjustment hasn’t been scheduled yet, but an inside source reported that it won’t be long before it is.