Taxi sector reform heralded

A Chinese mobile phone user uses the taxi-hailing app Didi Dache backed by Tencent on his smartphone in Shanghai, China, 16 October 2014. [Photo/IC]

The most serious distortion of the current taxi sector regulations lies in monopolistic operation by taxi companies resulting from the control on the number of cabs and a strict market access, Zhang Guohua, director of an institute of urban traffic research affiliated to the National Development and Reform Commission, the top economic planner, pointed out in a recent signed article.

Both the government and taxi drivers fail to share the profits from such a monopoly, which is dominated by the taxi operators, while consumers have to pay for the monopolistic market, he said.

Given his official background, Zhang's lashing out at the taxi sector has drawn much attention, and it is expected this will herald the country's efforts to reform the long-controversial and problematic sector.

On May 18, the State Council promulgated a guidline for deepening the reform of the taxi industry. Some local governments, such as Shanghai, have also started their own reforms. Yiwu, a city in Zhejiang province, East China, recently published a program on the reform of its taxi industry. All these are necessary measures.

The taxi sector should be a marketized one that is completely subject to marketized regulation, operation and competition, and free from any administrative intervention.

In fact, the reform of the taxi sector is not that complicated and difficult as many may think. The current obstacles are mainly the taxi operators and excessive tolerance toward the vested interests involved. Therefore, before any substantial reforms are launched, an investigation must be made to determine who are behind the profit-making taxi companies.

What the government should do is overcome the vested interests, and then regulate and supervise the sector to ensure a healthy market environment.

The above is a China Youth Daily article published on Wednesday.