China's Taxi Industry Urged to Set Up Unions to Stop Protests

By Zhang Shidong

Nov. 16 (Bloomberg) -- China's state-approved trade union urged the taxi industry to set up union branches to protect workers' interests and maintain social and political stability, after drivers in at least three cities went on strike this month.

``The long-standing conflicts over management systems, industry guidance and the distribution of profit have led to an unsound environment for the whole industry and its employees,'' the All China Federation of Trade Unions said in a statement seen today on its Web site. ``Taxi drivers don't have suitable and smooth channels for voicing their complaints which has led to frequent mass incidents.''

An estimated 2,000 taxi drivers in the southern Chinese city of Sanya went back to work on Nov. 14 after a five-day strike, the official Xinhua news agency reported yesterday. The drivers were protesting the local government's failure to implement cuts in the cost of renting their vehicles and to curb competition from illegal taxis, Xinhua said.

The drivers returned to work after Sanya Party Secretary Jiang Zelin promised to ensure the implementation of a Jan. 1 directive that cut monthly rental fees to 5,300 yuan ($776) from 7,200. He said companies who had ignored the reduction would be forced to return the extra money they had charged drivers over the past 11 months.

Three transport officials in Sanya resigned yesterday for failing to implement the directive, Xinhua said yesterday, citing a spokesman for the city's Communist Party Committee.

Traffic Violations

The industrial action in Sanya followed a two-day strike by almost 9,000 drivers in Chongqing, the country's fourth-largest city. They were protesting over shortages of compressed natural gas which fuels their vehicles, the unfair division of fares between cabbies and their companies, high fines for traffic violations and competition from unlicensed taxis, Xinhua said in a report on Nov. 10.

Drivers in Yongdeng, a county in northwest Gansu province, also stopped work last week in protest at the rise in the number of illegal taxis, the news agency said in an earlier report.

An estimated 70 percent of taxi drivers in China come from rural areas and very few companies have set up a union, the All China Federation of Trade Unions said in its statement.

Taxi companies should set up collective bargaining mechanisms with their drivers, the union said. They should also implement labor contracts which would set salaries, vacation time and social insurance payments and make sure these increase in line with profit growth.

To contact the reporter on this story: Zhang Shidong in Shanghai at szhang5@bloomberg.net