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Privately Owned Taxi Firms or Not?

Shao Changliang, a middle-aged cab driver in Beijing, has come under the spotlight since he challenged the decade-long ban on individual operation in the city.

Shao, along with two other taxi drivers, filed an application to the Beijing Municipal Transportation Management Bureau for an individual taxi licence at the beginning of this month.

Approval of such a licence has been officially frozen since 1994.

As Shao expected, their applications were rejected by the bureau on July 12 with a reply that the industry is saturated and the bureau needs to control overall numbers.

Refusing to give in, Shao and his fellow drivers visited the bureau again last Friday and asked for a public hearing on the issue.

Wen He, an official with the bureau, claimed that the application was just a personal demand and was not a significant issue related to the public's interest, so Shao's request for a public hearing was not granted.

But Shao argued that the development of the taxi industry concerns tens of thousands of people. Their application might help promote the reform of the current operation that favours only selected companies.

Finally, Wen said his bureau would think the issue over and make a decision after negotiating with agencies concerned.

According to the Administrative Licensing Law that took effect on July 1, if the applicants request a public hearing, government organs should arrange the hearing within 20 days after the applicants file.

"What we are doing is trying to set the ball rolling," said Shao, who has been a taxi driver for nearly 10 years.

He said if the current barriers for individuals to enter into the trade could be removed, not only the cab driver's earnings, but also the country's tax income would increase significantly.

"Meanwhile, the participation of individual taxi drivers could introduce more competition into the trade, which might trigger price adjustment and bring more benefits to consumers," said Shao.

Following Shao's application, which is the first since the ban was issued 10 years before, more than 1,000 taxi drivers filed applications to the bureau in the past two weeks, according to a report from the Beijing Times.

Beijing taxi drivers have long complained that they work long hours but make little money after payments to their companies.

Generally speaking, the cab drivers have to pay a cab deposit of around 40,000 yuan (US$4,800) to a taxi company to acquire a licence. In addition, they must pay their companies at least 4,800 yuan (US$580) for rental fees every month, according to Qiang Lei, a lawyer in Beijing who has investigated the cab driver's working situation the last couple of years.

In order to make a living, taxi drivers usually rise very early every morning and drive their company-owned cabs 13-14 hours nearly everyday, said Qiang.

Actually, many deputies to the Beijing Municipal People's Congress have appealed for many years to break down the barriers for individuals to enter the taxi sector. However,no breakthrough so far has been reached.

(China Daily July 19, 2004)

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