Between the competition and the capitalists: Guangzhou’s taxi driver strike

guangzhou taxis on strike

Many of Guangzhou's 40,000 taxi drivers have been on strike over squeezed pay and excessive competition. The impacts of their strike remain unclear.

Submitted by Nao on October 22, 2014

On the opening day of the biannual China Import and Export Fair (also known as the Canton Fair), one of the busiest days of the year for Guangzhou taxi drivers, the roads were stuffed, but strangely, there were few taxis in sight. A large chunk of Guangzhou’s approximately 40,000 taxi drivers had decided to collectively take a rest break. This massive strike of Guangzhou taxi drivers, covering the whole of the Guangzhou urban area as well as Huadu, an annexed city now belonging to Guangzhou, was sparked by a strike call first sent out on October 7th and circulated on the internet. Taxi drivers were acting in response to long standing disgruntlement with deteriorating conditions in the industry—fees not keeping up with inflation, increasing “membership fees” (payments to the taxi companies they are contracted under), increasing competition and decreasing respect.

The taxi drivers actions started on the 15th. Some reports claim nearly 90% participation1 , but other on the ground observers did not notice a significant disruption to taxi services. The strike continued the next day, but as results continued to not be forthcoming, drivers gradually returned to work. Another call out was soon circulated for a step up in actions on the 19th. Their first action had failed to put enough pressure on the government, the call declared; it had allowed people to still get to work cheaply by mass transit. To achieve what they had set out to accomplish, they would have to intentionally demonstrate their power by slowing the roads, coming out at rush hour and driving at speeds of 10-15 kilometers per hour to clog up roads. It seems several days later that this action has come and gone without dramatic impact, but what drivers are planning we do not yet know.

Guangzhou taxi drivers are hollering for government protection and patronage at a time when their position is being squeezed between new ride-for-rent systems and increasing consolidation of the taxi industry itself. The way their demands are framed reflects the conflicted position of those who are falling down from an acceptable position in the system. While taxi drivers have never been that high up the social ladder, there was a time when they were at the upper end of the working class, petty business owners able to make a relatively high monthly wage. That is no longer the case, and the drivers’ demands hearken back to a day when investment and competition in their industry was less suffocating, looking towards the government to bestow it. Their action is both impressive and myopic, a place where drivers are making visible the increasing pressure they face and experimenting with their collective power but also fighting to shut others out of the industry.

Industry Structure

Guangzhou currently has 84 taxi companies.2 These, however, are dominated by three big companies, two of which—GuangJun and Guangzhou Transportation Group (the other is Baiyun)—are state owned enterprises. Taxi drivers who have been in the system for a while have experienced a number of different labor relationships with these companies, moving from being relatively independent affiliated drivers to being “employees” now. In the golden days of taxi driving in Guangzhou, drivers could buy their cars. Over the course of three years, they would pay off their vehicles, after which the cars would belong to them and they would pay only a small “management” fee to their companies. Drivers at this time were semi-owners—relatively free and able to earn a good living.

This all changed in 2001, when drivers were converted to a contractor system where cars remained owned by the company and drivers paid only a deposit for their vehicle but a much higher monthly rental fee3 . Drivers lost their status as owners and became instead contractors. This came with many of the problems usually associated with contract systems: risks offloaded on drivers and reduced incomes in the long term while the company continues to profit. Beginning company by company in 2013, Guangzhou drivers transitioned from being contractors to being “employees,” paid basic monthly wages and with maintenance and gas costs handled by the company. However, for drivers this has not meant increased wages, nor has it meant the social insurance and protections usually associated with employment. Many drivers still do not possess these. Instead, workers are receiving less than ever before. More money is deducted from them out of their bonus pay—the piece rate they get over and above their basic wage of 1800. This is now considered part of their “membership fee,” which has been expanded to include payments for gas as well as miscellaneous costs the company is now responsible for4 . The structure has in fact allowed companies to take more out of drivers’ pockets, by charging them 66 cents premium over the market price for gas and pocketing 80% of the natural gas subsidies allotted to drivers by the government. For the extra gas alone drivers pay an extra 540 yuan per month, and including lost subsidies they make an average of 1000 yuan less per month than before5 .

Increasing Competition

In addition to their continuing devaluation by the company, drivers have directed a lot of their anger at the increasing competition in the system. As one long-time driver complained, years ago the tests for becoming a taxi driver were strict. Not many people passed6 . Now, not only have the standards for testing to become a licensed taxi driver been driven much lower as Guangzhou opens up thousands of new slots every year, taxi drivers’ positions are being challenged by an increasing number of “black taxis” and informal web-networked rent-a-ride services. “Black taxis” are unlicensed vehicles preferring not to deal with the overhead and increasingly squeezed pay of the official system, who risk major fees (in Shenzhen, a driver told me these reach 300,000 for being caught) to instead do business outside of the system. These drivers, so long as they are not caught, can make more and pay less than licensed taxi drivers7 . Perhaps even more a threat are the online rent-a-ride services–notably kuaidi and didi—that allows users to call rides from their phones, including both official company cabs and private cars driven by untrained (they receive one day of training) casual drivers trying to make an extra buck. They are a cross between the US’s misleadingly named ride-sharing services and official cab reservation services. These have become hugely popular recently, and have raised a great amount of anger among official taxi drivers, such that on October 18th, while the Guangzhou action was still in process, another group of drivers in Hangzhou demonstrated against the same phenomenon.

A significant amount of drivers’ angers have been channeled in this dismaying direction, against other people who are trying to make life a little better for themselves in this once lucrative industry. The drivers hotly call on the government to step up regulation, crack down on the black taxis, and outlaw the private rent-a-ride vehicles. While these demands would not be impossible to achieve, they would merely reinforce taxi drivers as a privileged class among workers and force other similar workers out of the industry.

Squeezing More out of the Customer

While drivers have asked for a reduction in membership fees to their companies, they also loudly demand an increase in the base price of taxi travel in Guangzhou. Perhaps it is that taxi drivers see this as the more plausible solution, but this is a more concretely articulated and clear demand than the reduction of membership fees or returning of car ownership to the drivers. Drivers are demanding an increase in the starting price for taxis, a figure which hasn’t increased in ten years. Last year fees were technically increased from 7 to 10 yuan, but as 2.5 yuan gas fees (paid by the customer) were eliminated at the same time, this left drivers with only a 0.5 yuan increase. To worsen the situation, the idling fee for taxis is 26 yuan per hour, while the actual cost of idling a car is 37 yuan per hour. Every time taxis must idle, drivers lose money. The same when they must go far outside of the city, a situation under which most taxi drivers are paid extra compensation. Guangzhou’s taxi drivers, however, have a 35 kilometer limit. Unless they travel out of that area—further than it takes to get from the city center to the airport—drivers do not get extra compensation even if they drive back empty-seated. The fee regime for taxi drivers needs to be amended, but to increase fees for the customer may lose them popular support when instead they could fight to wrest of control of profits from the company, taking control of cars back into driver hands and making as much money as their black cab friends, through an association of their own.

Demands and Organization

Whatever their standpoints might be, Guangzhou’s strike has vocal organizers behind it. They summarized a set of goals in their first call to action, which laid out three demands:

1. Rigorous suppression of black cabs, imitation cabs, Conghua and Qingyuan cabs (from other localities, not licensed to work in the urban area)
2. Reasonable decreases in fees, reasonable increases in natural gas subsidies
3. Adjustment to overly low start-up prices and idling fees, and to the 35 mile min

The letter writers called all taxis to cancel work, instructing those afraid of havoc to stay at home and not try to drive their cars, while pointing all those not afraid to two different congregating areas in Guangzhou and one in Huadu. This way taxi drivers organized to be physically together and able to support each other and build solidarity. They left clear instructions that the struggle would not be over in a day—that they would have to hold out if they wanted to win. Leaders among the taxi drivers had a sense of the battle that would be necessary. In their second letter, the resoluteness of the leadership was even more visible. Here they called upon workers to slow traffic wherever they were, declaring that the best way to put pressure on the government was to put pressure on the province government.

The coordination of this strike also seems hopeful in that, like the recent Higher Education Mega Center sanitation strike, they are uniting migrant workers and locals together. One of the three mega companies—Guangjun—is famous for hiring only local drivers who know the roads better than any non-locals. This company was once known to have an air of superiority, but they have gone on strike together with the others.

Guangzhou's striking cabbies are currently caught between their historical identity as one of small independent owners protecting a relatively privileged industry, and their new one as employees, squeezed ever harder and harder by a boss. Their tendency to turn their anger towards their competitors rather than their bosses, who pocket a huge chunk of their profits, is still very strong. Their solidarity it seems, has not been strong enough to hold out under strong pressures, and many people wish to simply leave the industry, but whether agitation will develop and continue remains to be seen.

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  • 2Darkmamu, “10月15日16日广东省广州市逾万辆出租车罢工”
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