Chinese city scraps taxi franchise fees

Hangzhou, in eastern China’s Zhejiang Province, is planning to eliminate taxis’ franchise fees paid to the government as it seeks to break an oligopoly in the industry.

The move came as the emergence of taxi-hailing apps challenged the current system, allowing customers to access a larger pool of private vehicles that boast better service and lower prices.

But the fiercer competition has increased pressure on cab drivers, leading to protests in some cities.

To help drivers earn more money, Hangzhou plans to scrap the government’s portion of the management fees, according to a draft guideline released Monday.

SOUNDBITE(CHINESE) LU XIANDE, Vice chief, Hangzhou’ s traffic management bureau
“The new policy will mean an average reduction of 400 yuan (63 U.S. dollars) per month in fees for taxi drivers.”

Currently, taxi drivers in Hangzhou pay up to 8,000 yuan a month to register with one of the city’s management companies.

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