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Why does Beijing have so many illegal taxis?
2006-06-08
China Daily
Now that taxi fares in Beijing have been raised from 1.6 yuan (20 US cents) to 2 yuan (25 US cents) per kilometre, many people are beginning to question the capital's taxi management system. Meanwhile, the issue of illegal cabs, which have no operating licences, is also coming to the fore.
The corporate-style management of taxi companies and the existence of illegal cabs are actually the two questions vital to determining the future infrastructure and operational mode of the taxi sector.
Let us first look at illegal cabs. Media reports say that a one-month campaign to crack down on so-called "black taxis" was launched in late April.
Massive fines were imposed during the campaign, with the highest reaching 500,000 yuan (US62,500).
A simple question arises: Given that this is such a huge amount of money, are such fines realistic? Naturally, few illegal taxi operators can produce 500,000 yuan. If one really can, then what is the point of him operating an illegal cab? Why not do something else that is much more decent?
More substantial questioning is, however, aimed at the motivation of the current crackdown.
It is widely believed that the number of illegal commercial passenger vehicles, including improvised "motorcycle taxis," exceeds 72,000, larger than the number of regular cabs, which stands at less than 70,000. It is quite abnormal that illegal taxis outnumber legal ones in a city. This points to the stark fact that the authorities' management was far too lax for a long period of time, and that previous measures to crack down on "black cabs" were hopelessly weak.
Then, why did the harsh campaign come all of a sudden?
A candid answer is given: To justify the rise in taxi fares.
The forceful crackdown is in sharp contrast to the fact that although severe punishment could have been meted out to "black taxis" in the past, no such steps were actually taken.
This contrast betrays a hidden logic. In the past, those who suffered most from the operation of illegal cabs were regular taxi drivers. Now, with the rise in petrol prices, relationships between different interest groups are being realigned. And the interests of the taxi companies must be protected.
Against the backdrop of oil price rises and falling automobile prices, taxi companies are actually beneficiaries of taxi fare rise.
Given the fact that taxi drivers' interests could not be harmed any further, it is the customers, therefore, who have to shoulder the burden of rising costs.
In this scenario, customers naturally turn to the cheaper illegal cabs. This means that legal taxis obviously have fewer passengers.
How do we stop more passengers from turning to "black taxis?" It's certainly unrealistic to imagine that we can do this by squeezing cabbies even more. Beijing's taxi drivers work extremely long hours while earning disproportionately low incomes. The logical act, therefore, is to target the "black taxis."
Some may argue that the crackdown campaign is intended to straighten out the taxi market, rather than being for the benefit of any particular interest group. Although this argument sounds plausible, it is far from persuasive. People are likely to ask why the number of illegal passenger vehicles has swelled to more than 70,000 over a fairly long period of time during which "inaction" might be the best word to describe the authorities' behaviour.
Such questions significantly weaken the legitimacy of such a crackdown campaign. At the same time, some people express sympathy for the "black taxi."
Some say the existence of large numbers of illegal taxis reflects market demand. The fact that there are almost as many illegal cabs as legal ones shows how bad the bona fide service is at meeting market demand. Some people also say that "black taxi" drivers are willing to take passengers to places regular taxi drivers are reluctant to travel, and therefore provide a badly needed service.
Some maintain that the existence of large numbers of "black taxis" is the result of the monopolistic way in which the taxi sector is run.
As early as a couple of years ago, reports started to appear in newspapers saying that taxi companies represented a type of vested interests and that they had close and complex relations with relevant government departments.
Others say that taxi companies treat cabbies too harshly, who have to turn over to their firms a disproportionately large share of their earnings in compulsory fees.
Still others sympathize with illegal taxi drivers because they are members of a "disadvantaged group," with many being laid-off workers and farmers who have lost the land they till in the course of urbanization.
Finally, some say that such devastating fines are totally out of proportion to the crime actually committed.
Sympathy, however, cannot replace law and rules. No government in any city on the surface of the earth would tolerate the existence of "black taxis," which operate beyond the regular management system and do not pay taxes to the government, no matter how much sympathy they command from the public.
Moreover, illegal cabs and their drivers are the cause of many problems overcharging, cheating and random parking that chokes traffic.
The focus of this author's discussion is, however, not so much about the question of how the taxi industry should be defined in Beijing's general economic framework as about the question: What are the wider implications of the "black taxi" phenomenon?
Our analysis leads us to the following conclusions.
First, the existence of illegal taxis is an "anti-establishment" phenomenon because they operate without established institutions and rules, though the rationality or irrationality of the established order and rules is another question.
Second, "black cabs" have attracted sympathy from many members of the public, including those who are unhappy with the current way the taxi sector is run, in addition to those who actually use "black taxis." This kind of sympathy is an expression of "anti-establishment" sentiment.
Third, when all this stems from discontent with unfairness and maladies in the current institutions, it will become increasingly difficult to tackle this "anti-establishment" behaviour and a vicious cycle could be set in motion.
As a matter of fact, this "anti-establishment" phenomenon is not restricted to the taxi sector. It exists in other fields, especially those operating as monopolies.
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