From "monopoly" to monopoly - the development of taxi industry

From "monopoly" to competition

The first real taxi company in New China was the state-owned Capital Automobile Company founded in 1951, which was mainly to meet the needs of foreign affairs reception and other activities. In 1956, with the completion of the three major reforms, the private taxi industry that survived during the Republic of China was incorporated into the national track, and the public-private partnership of the taxi industry was realized, and the first "monopoly" stage of the taxi industry began.

During this period, the general public basically did not use taxis, because the cost was high and the price was expensive, and the other was that buses and bicycles were the mainstream mode of travel. Therefore, taxi to foreign guests, overseas Chinese and other groups as the main object of service. The taxi that is now understood as "waving and stopping" did not exist at that time, but used a "fixed-point passenger" method.

Taxi was criticized as a "decadent bourgeois lifestyle" during the "Cultural Revolution" period, and once suffered a severe contraction, but gradually recovered after the reform and opening up. With the change and loosening of the policy, the taxi industry has been given opportunities for development. In the late 1980s, a number of state-owned and collectively owned taxi companies emerged, while some individual taxi licenses were issued. However, at this time, taxis were still only a luxury for high-income or special status classes, and had not yet become a choice for people to travel.

In 1992, the Beijing Municipal government put forward the slogan "One wave can stop five taxis" to solve the problem of taxi difficulty, and the taxi industry began to open up to private capital, a large number of private companies were established, taxi drivers contracted with these companies, obtained the right to use the car, and paid a certain amount of "management fees". The rest of the revenue goes to the driver - the "management fee" paid to the company becomes what is now commonly referred to as "subscription money." According to statistics, by 1994, there were more than 1,400 taxi companies in Beijing, and the number of taxis reached 60,000. During this period, although the driver has to pay "subscription money", due to the fierce competition and high demand, taxi drivers have become a good job.

In 1994, due to the chaos caused by fierce market competition, such as "carpooling", refusing to take a ride, rifleing customers, and competing for "territory", and also due to the special public nature of taxis, the government intervened to limit the total number of taxis in the city, and the total number of taxis in Beijing has been maintained at about 60,000 in the following 20 years. During this period, the rental price of taxis per kilometer began to adjust upward, and more importantly, in 1996, the Beijing Taxi Administration issued the Notice on Strengthening the management of Enterprise Operation tasks Contract, taxi enterprises implemented contract management, the original taxi drivers to the company to buy the vehicle will be recovered, while the taxi "contract fee" significantly increased. In the 21st century, Beijing taxi companies have undergone large-scale mergers and reorganizations, from more than 1,000 to about 200 today. In this way, since the new taxi companies basically can not survive, the competitive pressure of taxi companies is relatively smaller, and the monopoly advantage is relatively expanded. Due to the franchising of taxis, illegal "black cars" are suppressed, and dried taxis have to charter cars to these companies, so the companies begin to expand, intensifying the exploitation of drivers. Mainly by increasing the amount of "contributions". The big companies have monopolies and franchises that exploit taxi drivers, block government reforms, make more money rather than innovate, and even become a relatively independent interest group.

From competition to the monopoly of "private" capital

However, the position of this interest group was disrupted by the Internet storm. The exponential expansion of mobile networks and smart phones has created material and technical prerequisites for the development of online car hailing. Founded in June 6, 2012, Beijing Xiaoorange Technology Co., LTD., founded the "Didi Taxi"; In May of the same year, Hangzhou Kuaizhi Technology Co., Ltd. was established, and in August, "Kuaidi Taxi" was listed in Hangzhou. Subsequently, the two online car-hailing companies merged small companies, cooperated with Tencent or Alibaba, fought for taxi companies, invested huge subsidies to attract users, and rapidly increased the volume and scale, developing into two giants in the field of online car-hailing in 2014. Various online ride-hailing companies have also established their own private car business, whose low "subscription" amount and attractive conditions have attracted many taxi drivers to jump ship, and beat traditional taxi companies with their increasing market share.