Summary of Key Points
Traditional taxis are facing difficulties due to the combined impact of low-priced competition from online car-hailing services and changes in passenger travel habits: passengers perceive taxis as expensive, while drivers work 12 hours a day yet still struggle to make a decent income. However, taxis have not been completely phased out, as they play an indispensable role in serving vulnerable groups such as the elderly and providing emergency transportation. The industry is seeking solutions through policy adjustments (such as regulating low-price marketing by online car-hailing services and establishing a 95128 emergency call hotline) and integrating traditional taxi services with digital technology. In the future, a balance of reasonable regulations, labor protections, and digital integration will be essential for taxis to overcome their current challenges.
Why Do People Think Taxis Are Expensive?
The perception that taxis are expensive is not due to price increases; rather, online car-hailing services have set a new lower standard. In fact, taxi prices have remained relatively stable over the years (for example, in Nanjing, there have been no significant price changes since 2017). The issue lies with the more flexible pricing mechanisms of online car-hailing:
- Low costs and algorithmic pricing: Online car-hailing services often use electric vehicles, which are cheaper per kilometer than fuel-powered taxis. Platforms can adjust prices dynamically—lowering fares during off-peak times to attract more passengers and increasing surcharges during peak hours to cover driver costs, while also offering fixed-rate or discounted services.
- Fixed taxi pricing: Taxis are subject to government-regulated prices, with clear guidelines for starting fees, per-kilometer rates, and additional charges during peak hours. This makes it difficult for taxis to reduce prices as flexibly as online car-hailing services.
For example, a trip from Nanjing South Station to Xinjiekou by taxi costs 85 yuan due to peak-hour surcharges, while an online car-hailing service may only cost 30 yuan. It's not that taxis are inherently expensive; it's the comparison with lower-priced online options that makes taxis seem more costly to passengers.
Why Don't Taxis Make Enough Money?
Drivers are bearing the brunt of this competition:
- Declining income: A driver in Nanjing used to earn 400 yuan in 8 hours but now only earns 200 yuan after 12 hours of work, before deducting costs. Online car-hailing drivers also face similar challenges, with an average hourly income of 27 yuan in 2024. After deducting fuel/energy costs and platform fees, their earnings may not even meet the local minimum wage.
- High costs: Drivers must pay monthly management fees (300 yuan), insurance (nearly 10,000 yuan per year), and for vehicle maintenance, resulting in a daily cost of nearly 100 yuan. With only 200 yuan in earnings after deducting these expenses, they are left with little money.
- Exhausting work: Driving for 12 hours a day leads to health issues such as back and neck problems, and drivers rarely have time off, with only a few days off during the spring season.
Taxis Will Not Disappear
Despite the dominance of online car-hailing services, taxis still have three irreplaceable roles:
- Serving vulnerable groups: Many elderly people do not use smartphones to hail cars and rely on traditional taxi services.
- Emergency transportation: During extreme weather or holidays, online car-hailing services may be unavailable, leaving taxis as a vital means of transport for essential services and personnel evacuation.
- Efficiency during peak hours: Taxis can provide immediate service at train stations and airports, where online car-hailing services often have long waiting times.
Where Does the Future of Taxis Lie?
To overcome their challenges, the taxi industry needs to make several adjustments:
- Policy support: Policies such as banning fixed-rate and discounted services by online car-hailing platforms and ensuring drivers earn at least the minimum wage can help reduce competitive pressures. A national 95128 emergency call hotline can also make taxis more accessible to the elderly without the need for apps and reduce driver fees.
- Integration with digital technology: Pilots in Nanjing have shown that taxis can accept orders through online platforms, charging the same as online car-hailing services and utilizing digital traffic data to increase drivers' earnings.
- Industry reforms: Changing traditional management practices (reducing driver fees) and improving service quality (e.g., by regulating driver behavior and maintaining vehicle cleanliness) can help taxis regain their reputation as reliable and safe modes of transport.
The future of taxis lies in finding a balance between pricing, labor protections, and digital integration to attract and retain passengers.