Cancel taxi money? Beautiful dreams shine into harsh reality
Stone
The Ministry of Housing and Urban-Rural Development and the Ministry of Public Security jointly issued a joint promulgation today: Abolish the "Measures for the Administration of Urban Taxis," bringing to an end this regulation, which came into effect on 1 February 1998. This is something to celebrate, as early as 2012, when the country first emerged online ride-hailing, the ride-hailing software that makes everyone a "taxi driver" will break down barriers, and in time will force the government to reform the rental industry. But today, the Internet is full of jubilation, and even some media use "share money to cancel" this kind of carnival, but the author thinks, I'm afraid, the cheers are too early, thinking too beautifully. Although the old law is waste paper, of course, it is progress. However, how to manage it next, the "Guiding Opinions on Deepening Reform and Further Promoting the Healthy Development of the Rental Car Industry" and the "Interim Measures for the Administration of Online Taxi Booking Business Services" issued by the state seem to be quite far from eliminating the share money. The Guiding Opinions clearly require that taxi operation rights shall not be speculated or transferred without authorization. Paid user fees will be phased out gradually. However, to say that this is to say that "share money" should be abolished is a great misreading. First of all, we must clarify what is share money, the so-called "taxi share money", which is the contracting fee paid by taxi drivers to taxi companies, which is not only the main operating cost of drivers, but also the main source of income for rental companies. This includes the cost and profit of various rental companies (driver's salary and social insurance, vehicle depreciation and maintenance, site rental fees, business management fees, financial costs, tax profits, and paid use of vehicles, etc.). Among them, the government collects only a small part of the royalties for taxi operating rights, less than one-tenth. Because the rental company is basically in a monopoly state, the driver basically has no right to speak. Even if the royalties of several hundred yuan a month are canceled, for a total of at least 5,000 yuan a month, it can only be said that a drop in the bucket is better than nothing. 
(Source: Baidu Encyclopedia) So where should taxi reform go? The author believes that it is necessary to adhere to the policy of market-led and coordinated by the government. First of all, we need to clarify that taxis, as an important part of urban public transportation, have their responsibility for public services. This is essentially no different from a bus bus. The difference is only in the form of the service. This positioning is very important because it means that our taxi policy must aim to maximize the public interest, and cannot serve monopoly interests, nor can we completely allow the market to regulate itself. For example, in more remote suburbs, and even rural areas, there are bus lines covered, and many people with low traffic lines are actually loss-making, but the service must still be covered, which is determined by the public nature of public transport. Similarly, taxis should not only be clustered near crowded stations, airports, commercial areas, etc., but also due consideration should be given to the coverage of relatively low-traffic blocks, in a fully competitive environment, supply and demand can be freely priced, supply and demand will naturally achieve a balance. But taxi pricing is often not a complete market pricing, but government guidance, so many times taxis are not willing to go to places with fewer people, where you can't get a taxi is a frequent thing, rush hour taxi is more difficult to find, although the rise of a number of Internet ride-hailing to a certain extent alleviates this contradiction. Mobile Internet ride-hailing has tried to use the lever of free pricing to balance supply and demand, such as Uber, which has a mechanism of several times the peak price. The author believes that to a certain extent, the use of prices to regulate supply and demand should be encouraged, and it is also conducive to the rational allocation of resources. But, on the other hand, if we pay more attention to the public nature of taxis, it is not appropriate to let the price lever regulate it completely. Uber, for example, charged outrageously staggering fees during the Christmas rush. One of the American passengers was charged $2,635.97, or more than 17,000 yuan, for a 24-minute ride. This is the most "successful" and most unsuccessful case of the price leverage model in regulating supply and demand. Because, as an Uber company, he has no obligation to serve the public, and his peak pricing algorithm only uses the established supply and demand model strategy to increase prices indefinitely in an attempt to achieve supply and demand balance and maximize profits. Therefore, when the state formulates taxi policies, it must be reasonably adjusted in combination with market forces and public service goals. The author suggests, first of all, the national policy should break the monopoly situation of rental companies and greatly reduce the entry threshold of the industry. Let more operators enter this industry, increase the supply of taxi capacity, abolish the total number of taxi control, and the total demand for taxis is determined by the market, forming a situation of full competition. Only by allowing more real private capital to enter this market can we break the monopoly of rental companies, and only by lowering the threshold for drivers to join this industry, without being attached to rental companies, and becoming independent operators, can the employees of the entire industry have relatively equal bargaining power with rental companies. Let the decision to be affiliated with a taxi company be an option, not a helpless one. Only in this way will rental companies feel the pressure of competition and make profits from their own operational efficiency, rather than exploiting drivers' share of money. Due to the operating costs of the rental company itself, the share money can never be zero, but with the introduction of competition, this share money will tend to be more cost plus reasonable profit composition. At the same time, to effectively implement the abolition of management right fees, it is also necessary to abolish the total volume control. The "Guiding Opinions" also stipulates that the right to operate shall not be speculated and resold. In fact, if the total number of taxis is abolished and the upper limit on the total number of taxis is no longer established, the right to operate naturally has no value that can be speculated. In fact, if the total volume control is not abolished, and the purchase of business rights is not allowed alone, this regulation will become a dead letter, because if there is demand, there will be transactions, and this will not block the transaction of black market management rights at all. Under full competition in the market, especially when the government is involved in price setting, there is no need to worry about the release of total volume controls that will cause too many vehicles. Because once the market reaches saturation, new drivers will naturally not participate in the market when they join and are not profitable. This is the rational choice of market players. The government does not need to use vehicle utilization as an excuse to limit the number of new additions, the empty driving rate is high, it is not profitable, and naturally the new supply will decrease. It's all something that the market itself will balance. The government doesn't need to consider traffic congestion, and the efficiency of a taxi is in any case higher than that of a private car, and it is probably unfounded to say that the number of taxis will cause congestion compared to private cars. If there are really too many taxis to become a disaster, I am afraid that there will be fewer people buying private cars, and urban transportation will only be smoother in comparison. Second, the taxi and ride-hailing markets should be unified, the market should not be artificially separated, and the pricing model should also be unified as: market-led, government participation in coordination, and setting ceiling (maximum) prices. Balance must be taken into account the public service nature of taxis. In fact, the Guiding Opinions artificially divide online ride-hailing and traditional taxis into two markets. Regulations: Cruise taxis (actually referring to traditional taxis) can cruise on the road to solicit customers, wait at stops, and also provide reservation operation services; Government pricing or government guidance pricing applies to cruise taxis. However, booking a taxi (which is actually for online car hailing) is not allowed to cruise and solicit customers, and can only provide operation services by reservation. The author believes that this division is not conducive to the allocation of resources in the market and is not conducive to the unified supervision of the market. Online platform car hailing, in fact, is already market pricing, basically determined by the supply and demand of the market. (Of course, remove the current platform subsidies) For the pricing of traditional taxis, you can refer to the pricing of the online platform, take the median plus the subsidy amount (that is, the average market pricing), and to a certain extent to compensate for the larger operating costs of traditional companies and the more part of the cost of money borne by drivers. In this way, ride-hailing cars can also cruise on the street to pick up customers, greatly increasing the use of vehicles. At the same time, for platform subsidies, suspected of unfair competition should be stopped in time, once a platform monopoly is formed after long-term subsidies, it will be harmful to the interests of the people in the future, and it is also unfair competition for traditional rental companies. Of course, the unification of market and pricing rules relies on one premise, that is, the implementation of the author's first proposal, lowering the entry threshold, breaking the monopoly, and abolishing the total volume control. Without this premise, drivers of traditional taxi companies still need to face high operating costs caused by excessive share money, and cannot compete with online platform drivers. A key is that for the price model of UBER such a peak price increase, the regulations must give the maximum limit, such as not higher than 3-5 times the traditional taxi guide price, so as to avoid sky-high taxi prices, and can use the price to adjust supply and demand to a certain extent. Finally, regardless of traditional rental or ride-hailing, it is necessary to assume the responsibility of basic coverage of certain public transportation. Policies must consider how to encourage vehicles to operate in places with less crowds but weak public transport, so that there are cars to hail in places where it is difficult to take a taxi. So if you don't use price leverage, how to ensure the demand for some difficult places to get a taxi? This may have been difficult in the past, but with the advancement of technology, such policy incentives and regulation are fully possible. And the difficulty and cost of execution are not high. For example, whether online car hailing or traditional cars are equipped with GPS tracking and scheduling, it is fully stipulated that all vehicles must complete 5%-10% of orders in designated areas and times with low traffic every month. This can not only solve the problem of people's difficulty in taking a taxi in these areas, but also fully reflect the positioning of rental as an important part of public transport. Beyond that, supporting policies must also keep pace. For example, it is very inappropriate to restrict private cars as operating vehicles to join online ride-hailing platforms. Because once converted to the nature of operating vehicles, private cars need to be forced to be scrapped for 8 years. In fact, many private car drivers are reluctant to join, limiting the supply of capacity. In fact, the major ride-hailing platforms themselves have stipulated that vehicles must be joined within a few years, which has ensured the condition of vehicles to a certain extent, and the state should not over-supervise, contrary to the goal of decentralization. In addition, the stipulation that "online taxi booking shall not be connected to two or more network service platforms at the same time to provide operation services" is also not conducive to market flow and competition, and contradicts the idea of liberalizing the taxi market to improve services. To sum up, although it is impossible to completely abolish the "share money", with the deepening of market reform, the competition between rental companies will inevitably make this fee more and more reasonable. Of course, the premise is that the state can effectively break the monopoly, loosen the total number of taxis, and regulate the number of taxis as the market. In terms of pricing, it is also necessary to adhere to the market-led, the government appropriately participate in the regulation, the purpose of regulation should not be to protect vested interests monopoly the profits of rental companies, but must take the public interest as the largest, adhere to the positioning of taxis as public transportation, in order to formulate policies beneficial to the people. If we can stick to this direction, the author believes that this round of reform will definitely make taxis a more convenient bus option in people's lives.