Han Ximin

    ximhan@126.com

    SHENZHEN will cancel cab license fees and drivers will be able to negotiate monthly rent for cars directly with taxi companies, the city’s transport watchdog said in a press release Thursday.

    “In 2015, we canceled license fees for more than 3,000 new electric cabs. In the future, license fees for all cabs will be gradually canceled. In this way, the operating costs for the cab industry will be lowered,” said Yu Li, an official with the city’s transport commission.

    Under current taxi regulations, which were introduced 20 years ago, taxi companies spend hundreds of thousands of yuan on licenses sold in government auctions.

    In return, taxi companies charge drivers monthly rent on their cars, about 11,743 yuan (US$1,864) on average. The rent includes license fees, taxes, maintenance fees and management fees. The cancellation of license fees will cut the cost of renting a taxi by 3,000 yuan a month.

    Though the rule has been amended four times, the changes are widely seen as not enough since the traditional taxi industry faces competition from ride-hailing apps.

    “It is impossible for a cab driver who has to pay rent to compete with unlicensed Didi or Uber cab drivers,” said Xiong, a driver with the Shumkang Taxi Service Co. “For us drivers, rent will be reduced after the cancellation of license fees. Taxi fares could also be reduced. It is good for us to compete with app-based taxi operators and riders will also benefit.”

    Shenzhen’s license fees are much higher than in other Chinese cities. In the 1990s, Shenzhen auctioned a group of cab licenses valid for about 50 years. The cab licenses were sold for between 800,000 and 900,000 yuan.

    By the end of last year, the city had 84 taxi companies operating 16,275 cabs with 36,799 drivers.