Internet & Tech

Own goal

Qingdao’s taxi industry strike plays into hands of Didi and Uber

Qingdao Taxi w

A sunset industry?

Anyone who lives in London will have at some point felt the impact of a tube strike (the ‘tube’ being the colloquial term for London’s subway system). When the drivers of London underground trains refuse to go to work the result is heavy congestion above ground for everyone else still trying to get to their offices. It reminds Londoners just how much they need their train drivers, but it doesn’t necessarily make them sympathetic to their cause.

In the Chinese city of Qingdao the local taxi drivers recently organised their own industrial action. Like the tube drivers of London, they found the local populace wasn’t sympathetic either. Worse still, Qingdao’s citizens actually discovered life was better without them.

The cabbies of Qingdao began their strike on June 15 and intended to continue it for five days. But after the first day some netizens were pleading for them to extend their moratorium indefinitely. Without the taxis on the road, congestion eased dramatically, and thanks to the prominence of car-hailing apps like Uber and Didi, commuters were still able to find transport easily.

Naturally it was the threat from Uber and Didi that had prompted the taxi drivers to go on strike – to protest at being undercut by often unlicensed drivers. Qingdao’s cabbies are also not the first in China to strike against the onslaught of web-based taxi services. Nanjing, Chengdu and Xi’an, to name a few, have all seen taxi drivers abandon their cabs in protest, as the rise of ride-hailing firms eats into the vested interest of taxi operators – most of which are controlled by the local governments (see WiC267).

The central authorities, meanwhile, have attempted to encourage technological progress and protect traditional industries at the same time. Thus in October last year the Ministry of Transport said it would devise new rules to level the playing field between web-booked taxis and those flagged-down on the streets.

One possible regulation that would deliver a critical blow to the likes of Uber and Didi would be a ban on subsidising passenger fares. In March the Minister of Transport criticised this practice, stating it created unfair competition for standard taxis and warning that “subsidies will not be handed out forever”.

The South China Morning Post reported a month later that the transport bureau of Guangzhou (a city which the Financial Times recently suggested was Uber’s busiest market globally) summoned executives from Didi and Uber and ordered them to drop their subsidy schemes, again citing complaints of unfair competition.

However, Beijing News suggests that the real death knell for traditional taxis – specifically those in Qingdao – has been their poor service and self-interest. “If a taxi driver feels that the place you want to go is too remote, too far, too inconvenient or too much anything that will prevent them from making quick money, they won’t feel like taking the fare,” the paper writes.

In fairness, whilst a driver with Uber or Didi might be more likely to pick you up, there have also been complaints of bad service, ranging from the perverted to the deadly (see WiC325). But what the failed protest in Qingdao truly revealed was just how far the tide has turned against traditional taxis.

One writer for Sina recommended quite bluntly that traditional taxi drivers should get out of the industry, or if they have no other workable skills, then they should join ranks with the likes of Didi and Uber. Indeed many city taxi drivers do already moonlight as Didi drivers. But another of the government’s draft proposals would prohibit drivers from working for more than one company, forcing them to make a choice.

At the moment, the odds don’t look to be in favour of the traditionalists. In the bleak words of the Sina columnist: “The revolution has already come, and the old system will eventually fall.”

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