AFP
China's announcement that it will legalize taxi-hailing apps like Uber and Didi Chuxing has sparked fears that workers in traditional service industries, where labor rights already receive scant protection, will be left high and dry by the online 'sharing economy.'
The huge popularity of the apps, which attracted some 97 million Chinese customers last year, has left drivers of traditional taxis with falling incomes as their companies struggle to compete, sparking mass industrial action and even violence in a number of cities.
Last June, online videos showed violent clashes in the eastern city of Nanjing between traditional cab drivers and those signing up to drive for the ride-hailing apps.
The new rules will legalize ride-hailing services with effect from Nov. 1, dashing the hopes of traditional drivers who saw their income threatened.
However, in an apparent concession to the traditional industry, the government says it will place regulations on the training of drivers and the state of the vehicles used, official media reported.
The new rules also require online ride-hailing platforms to sign labor contracts with drivers, although many strikes in China are sparked by disputes over the failure of employers to deliver on contractual pay and conditions.
Uber Technologies on Monday announced it had handed over its China business to homegrown competitor Didi Chuxing in return for 20 percent stake in that company.
Mandatory driver training
The move came after Beijing announced the new employment requirements for ride-hailing firms, which will include the mandatory provision of professional driver training and safety checks for vehicles.
The tighter employment rules strike at the heart of the ride-hailing business model, which allowed an army of Chinese car-owners to moonlight as Uber and Didi drivers in their spare time.
But a traditional taxi-driver surnamed Hu from the southern Chinese province of Guangdong told RFA that he believes the rules aimed at protecting full-time drivers' livelihoods won't be properly enforced.
"If the rules aren't enforced, if the ride-hailing apps don't fill the gaps in their drivers' income, then they won't be able to carry on driving for them [as a full-time job]," Hu said.
"We have no way of knowing if the ride-hailing companies will do this, and if they don't, the drivers won't be able to continue in business."
In Zhuzhou city, in the central province of Hunan, tensions between the old and the new kind of taxis have also given way to violent clashes and protests in recent months.
Guangzhou-based rights activist Ou Shaokun said his city has seen a series of major disputes between the ride-hailing companies and traditional taxi companies in his city too.
"The traditional cab drivers wouldn't have an issue if they were getting by OK themselves," Ou said. "But if they're struggling to make ends meet, then they're going to have a big problem with [the new services]."
"The pressure is building up like a simmering pot."
He said the ride-hailing drivers tend to be relatively new to the business, and are clogging up already congested city streets, causing further problems for everyone.
"A lot of the Uber and Didi drivers don't know their way around, and rely on GPS, added to which you have hundreds of thousands of vehicles heading into the city, which has made the congestion problems even worse for residents of Guangzhou," he said.
"I think the government is being pretty weak here; it couldn't get rid of the ride-hailing apps, so it legalized them," Ou said.
Liu Kaiming, who directs the Institute of Contemporary Observation in the southern city of Shenzhen, said taxi-drivers aren't the only traditional service industry to be hit by the "sharing economy."
"The sharing economy has also hurt the hotel industry, as a lot of people in China are using sites like Tuniu to book hotel rooms," Liu said.
"People are using their own resources to meet demand in the wider economy, as well as creating some wealth for themselves," he said.
Fundamental misunderstanding
He said the government's attempts to force ride-hailing platforms to train and sign contracts with drivers shows a fundamental misunderstanding of such business models, however.
"These ride-hailing drivers usually already have a job, and they hire out their own private car in their spare time to get paid for giving rides," he said.
"They can take on this temporary work at any time they like, so that's a lot of flexibility for the drivers."
But drivers for ride-hailing app companies have already protested over pay and working conditions, the Hong Kong-based China Labor Bulletin has reported.
After the merger of Kuaidi and Didi in February 2015, drivers complained about new contract terms and working conditions imposed by the companies, said the group, which tracks strikes and industrial action across China.
"It seems likely that strikes and protests by taxi drivers will continue as local governments grapple with the growing influence of ride-hailing apps on an industry in urgent need of reform," it said in an article on its website in 2015.
But Hu Xingdou, economics professor at the Beijing University of Science and Technology, said there will still be a niche for traditional services for some time to come.
"I think perhaps it's younger people who like to use ride-hailing apps," Hu said. "Older people don't really like to use them; they prefer to stick out their hand and hail a cab on the street."
"So I think there will still be some role for traditional taxis for the time being."
And a Shanghai resident surnamed Ma welcomed the government's move.
"I think this will bring benefits, because it's very hard for ordinary people to flag down a taxi on the street," she said.
"If the ride-hailing apps are given the green light, then there'll be more competition, which means falling prices," Ma said. "There should be a huge number of cabs available for people to use, which will make things very convenient."
Reported by Wong Lok-to for RFA's Cantonese Service, and by Gao Shan for the Mandarin Service. Translated and written in English by Luisetta Mudie.
