The local government of Hangzhou, a city in East China's Zhejiang Province, is eyeing to eliminate taxi franchise fees to break free from the so-called "taxi monopoly" in the industry.
The entry of taxi-hailing applications have challenged the long-existing cartel in the industry, and with it, taxi drivers have been seeing increased fees and tougher competition.
Hangzhou plans to scrap the management fees, which is a portion given to the government, retroactively starting from Jan. 1, 2015, a draft guideline stated.
Under the new policy, there will be an average deduction of 400 yuan in fees for taxi drivers, Lu Xiande, the city's traffic management bureau vice chief, remarked.
Moreover, a refund of about 100 million collected so far this year will also be undertaken.
Taxi drivers in Hangzhou currently pay up to 8,000 per month to register with a large management company in the city.
The guideline also trims taxi ownership and management rights. It also seeks to establish state-owned firms to regulate the market.
The taxi management system in China is characterized by a key number of huge firms that levy large amounts of operation fees. This scheme has earned the ire of many for demoralizing cab drivers and for providing unsatisfactory services.
Earlier in May, another Zhejiang city, Yiwu, announced that it will intensify its efforts in breaking the existing "taxi monopoly" in China. As part of the city's plans, it will remove the taxi license quota that has been blamed for further increasing the incidence of taxi scarcity in the country.