Taxi Driver’s Life Tougher – Part II

Taxi drivers’ life is one of the major topic I continously observe the report. They are very typical hard-working people in this city, and come from a world I don’t normal have access. Talking with taxi drivers is always my favorite. Their stories are vivid mirror reflecting the changes of the city.

Recently, we clearly feel taxi become rare resource for this city. Not at only rush hours, but also at normal time it is hard to find a taxi. I thought the major reason was because of the hot summer – these days, Shanghai is just too hot which drives up the demand. However, the recent talk with a taxi driver revealed another part of the story.

About 28 days ago, the price of gas increased a lot. Yesterday, it kept increasing. The price of 93# gas increased from 3.96 RMB/L to 4.26RMB/L. I guess it may be related to the change in RMB price? Just some guess.

The gas price change dramatically increased the cost for taxi drivers. They may need to spend more than before. In summer, it is required that taxi much turn on air condition. It continue to increase the cost of operation.

To help them, the taxi companies give them 7 RMB per day compensation, but it is almost nothing compared to the cost. So many taxi driver finally find out that even if they work very hard 24 hours, they still gain much less than before, and sometimes cannot earn money. So they just quit.

According to one taxi driver, many taxi companies have empty taxi parking in their parking lot without taxi drivers. The increase of demand and descrease of supply caused the current situation.

P.S. Shanghai Taxi Driver’s Life Tougher

8 thoughts on “Taxi Driver’s Life Tougher – Part II

  1. The appreciation of RMB should help to lower the gas price given it is a free economy. However, the gas price is under tight control of the government. It’s not the interest of the monopoly state owned enterprise to lower the price…

  2. what’s worse, the drivers of qiangsheng company have to hand out more money than before. from 4800 to 6400 RMB per month…

  3. Retail gasoline prices in China are under tight control by the state owned oil companies. So far the state owned oil companies have been “subsidising” retail gasoline prices by keeping it artificially lower. With crude oil prices having increased from US$30/barrel to over US$60/barrel in the past 2 years, the refinery profits of the state owned oil companies have been severely squeezed, i.e. you have input costs doubled from US$30 to US$60 while they have not passed on the cost increases to consumers by raising retail prices proportionately. So the recent gasoline price increase is much over due and despite the increase still does not reflect true market realities (retail gasoline prices are much higher in Hong Kong).

    I believe the government understands that keeping retail gasoline prices low is one of the critical elements to help preserve social stability. After all, the 1998 riots and anarchy in Indonesia was sparked by the Suharto government raising gasoline prices.

    However, the negative of keeping gasoline prices artificially low is it encourages consumption and discourage energy savings and efficiency. I read somewhere that China’s energy usage on a per unit of GDP basis is several times higher than Japan, meaning there is a lot of wastage and inefficiency. I think the government recognizes this and is now trying to put together an energy conservation program while at the same time they look to secure important strategic energy assets, e.g. CNOOC’s bid for UNOCAL.

  4. The comparison of energy usagae of per GDP unit between China and Japan does not necessarily imply wastage and inefficency. The bigger portion thtat causes higher energy cost in China than in Japan is that China and Japan are at different ecnomic level: Japan is at a much higher level than China is. A simple example, the energy cost to produce a $5 million game software should be much much less than the energy cost of $5 million worth of steel.

  5. Dear JianShuo,

    Maybe it’s just me. But recently it gradually comes to my attention that there are more and more language errors in your English blogging. Now that you have started your Chinese blog and have probably much other stuff to deal with due to your blog’s own popularity, you might have less and less time for your English blogging.

    Your writing used to be smoother to read. So I don’t think it is merely a matter of language skills.

    I have been frequent visitor to this site since last October. Your writing about everyday life in Shanghai had helped me a lot with my last trip to Shanghai.

    I hope you keep writing. Many people including myself will appreciate your observation and sharing your thoughts.


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