And the locals are not happy about it.

beijing traffic.jpg
A Beijing traffic jam. (Jason Lee/Reuters)

Chinese media is reporting en masse  a story that,at first glance, seems impossible: During rush hour in Beijing, taxis can be found parked idle at the curb in the busiest parts of the city, as would-be passengers struggle to find a ride. As Beijing residents complain that it is becoming harder to hail a cab in the city, cabbies grumble that low fares, high monthly fees, and gridlock make driving during rush hour a money-losing endeavor-and that it is hard to scrape by even when driving conditions are good.

So many cabs, so few willing drivers

In one widely-circulated news report, a Beijing cab driver with over ten years' experience was quoted as saying that "more than ten thousand" cabs could be found parked around the city's center during rush hour, their drivers refusing to carry passengers until traffic subsided. Even when taxis do stop for passengers during peak traffic times, they often refuse rides if they think that the road ahead will be congested.

"It takes half an hour to hail a cab during rush hour, and even then it depends on the driver's mood," complained one Beijing commuter. "If you can't reach an agreement with the driver, they just leave." It is not uncommon for cabbies to bargain for a higher fare than they would get on-meter.

But cab drivers in Beijing protest that the costs of running a taxi are too high to make a decent living under the best traffic conditions, let alone during rush hour. According to a chart compiled by China Youth Daily, if a cab driver in Beijing works every day of the week for 10 hours a day, the basic costs of running his cab -- including rent paid to the cab company, car maintenance and gas -- come to around 30 RMB (about $4.83) per hour. This causes many drivers to park their taxis during rush hour, when it can often take 40 minutes to travel a single kilometer and leave cabbies earning less than their basic expenses.

"Who is willing to take part in a losing transaction?" one driver told China Youth Daily. "During rush hour, profitability for taxis is too low! After accounting for taxi rental and gas, we simply don't make money, and sometimes even take a loss. Why should I put myself through that? I'd rather lay low, get something to eat and rest for a bit."

Searching for a solution

In recent years, the Beijing municipal government has taken action to remedy the issue, but they have primarily focused on increased monitoring and higher punishments for drivers who refuse fares or try to overcharge passengers. In April 2012, a 2,000 RMB fine was instituted for drivers who purposely take roundabout routes, refuse passengers, bargain, or ditch customers before they reach their destination. In August 2012, GPS monitoring of cabs was introduced; and on December 28, 2012, a new rule was introduced under which drivers face a suspension of one to three years for refusing passengers or going off-meter.

But increasing punishment for drivers refusing fares has yet to prove effective; cabbies still refuse passengers by pretending they don't see them, tell would-be riders that they've just gone on break, or simply stay off the road during rush hour. Most importantly, punitive measures fail to resolve the root of the dilemma: it is no longer profitable for cab drivers to carry passengers during peak times, when taxis are needed the most.

People's Daily Online quotes Xue Zhaofeng, the co-director of Beijing University's Institute for Law and Economics, who believes that the Beijing municipal government's administration of the taxi industry is to blame. Xue told the Daily: "Because current taxi fares do not reflect the time costs of taxi drivers, the expense of gas during peak traffic times, and the danger of driving during bad weather, taxi drivers are avoiding customers when they are most needed. This has caused drivers and their would-be passengers both to lose."

The same report cites Renmin University professor Mo Yuchuan as saying that, in the context of administrative monopolies--when an individual or group occupies a lucrative "revolving door" between the government and a market--it is difficult to resolve the issue. It follows that, in order for cab fares to reflect the needs of drivers and the number of taxis on the road to reflect the needs of their customers, Beijing's taxi industry needs a move towards free competition and market liberalization. 

Netizens weigh in

Even China's Web users are weighing in with solutions. On Sina Weibo, A Chinese microblog platform that is similar to Twitter, user @EXPOTAXI0395 commented, "The pricing mechanism for taxis could be made more flexible. During morning and afternoon peak traffic times, fares could be raised accordingly, or government subsidies increased, to make drivers more willing to do business." @jolin是颗麦芽糖 felt that "it's mostly those shameless monthly rental fees" to blame.

Others expressed support for Beijing's downtrodden cabbies. @开车看海景 wrote, "I wouldn't be willing [to drive] at rush hour either -- not with the waste of gas, the bad mood, and the high likelihood of an accident. If you think cabbies make good money, calculate their earnings according to the time they put in. When converted into hours and days spent working, they have the lowest salaries out there."

Until the awkward imbalance between the value of Beijing's taxi service and the price is resolved, and cabbies are once again given proper incentive to carry passengers during rush hour, the residents of China's capital will have to get used to playing a game of cat and mouse with increasingly grumpy drivers. Or, they could take the weary advice of this author's cab-savvy friend: when you finally catch a taxi in Beijing, don't tell the driver where you want to go--ask him where he's headed, and see if it's on his way.


This post also appears at Tea Leaf Nation, an Atlantic partner site.

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