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From the Financial Times:

Over 1,000 taxi drivers in the eastern Chinese city of Hangzhou staged a violent strike to protest against stagnant wages and rising petrol prices, prompting the government to offer a small fare increase in a bid to head off further unrest.

Crowds of taxi drivers blocked streets near Hangzhou’s intercity bus station, stopping and in some cases attacking taxis that continued to pick up fares. A taxi carrying Financial Times journalists was damaged by a striker who repeatedly smashed a rock into the taxi’s bonnet. A smaller protest by taxi drivers also took place in a district of Shanghai on Monday.

The intense anger displayed by drivers in both Shanghai and Hangzhou reflects growing dissatisfaction among working people at price rises, including the recent rise in petrol prices.

The average income for taxi drivers in big Chinese cities has barely risen in the past decade, even as the cost of living has soared, and most drivers are required to hand over the bulk of their earnings to taxi companies. In June consumer inflation hit a three-year high of 6.4 per cent from the same month a year earlier, while food inflation jumped 14.4 per cent.

In Hangzhou, a large proportion of drivers are migrant workers whose high accommodation charges leave them little to live on. “We are just living on pocket money now,” said one. “We can’t earn anything.”

Drivers complain that the price they pay for petrol has not fallen, despite a drop in the global oil price. They also want to be paid more when stuck in the city’s notoriously congested traffic.

Several dozen police arrived to restore order and, according to state media, speak to the drivers about their grievances. But striking drivers continued to stop all passing taxis. The strike appeared to be spontaneous and disorganised, with no clear leaders.

The Hangzhou government late on Monday offered RMB1 per trip temporary compensation fee in a bid to defuse tensions, reflecting the government’s tendency to act quickly to contain unrest.

But most strikers reacted with disdain to news of the fare increase, saying it was too small to make a difference. Beijing will watch closely to see whether taxi drivers in other Chinese cities will be emboldened to demand higher fares.

In May, truckers at a container port in Shanghai staged a strike to protest over high port fees and rising fuel costs, prompting a swift response from authorities who waived most of the fees but also sent in police and paramilitary units to break up the strike.

Last year a number of regional cities across China, including Chongqing and the island resort town of Sanya, were clogged with huge strikes by taxi drivers complaining about stagnant wages and no access to social services.

Prices of petrol and diesel in China are at historic highs, and have not been lowered this year even though the price of Brent crude has fallen 6 per cent from its peak in April. Fuel prices are set by the Chinese government under a mechanism that is theoretically linked to international crude prices, but in practice price-setting is also influenced by factors such as inflation and social stability.

In recent years taxi drivers have been relatively quick to organise and air their grievances because the drivers can easily communicate with each another through radio to organise collective action.

China.org.cn:

Cab drivers said they had planned to strike for three consecutive days and would continue to gather at five different downtown areas Wednesday to air their grievances.

The strike started rush hours Monday morning. About 1,500 striking cabbies, mostly from central Henan Province, have continued to voice their complaints about skyrocketing food, gasoline and housing prices, and unchanged cab fares.

In response, the city government pledged to hike cab fares by the end of October and provide cab drivers temporary subsidies. According to the new polices, cabbies will receive a one-yuan (0.16 U.S. dollar) subsidy for each trip, starting next Monday.

Cab drivers have welcomed the new polices, although some of them said the cab fares should have been raised long before and the one-yuan subsidy was too small.

"Those measures are only temporary. They (the government and cab companies) should do more and improve their polices to resolve the problem fundamentally," said a representative of the striking cabbies who would only give his surname, Chen.

"The cab companies must buy endowment insurance for every driver, and set up trade unions whose members should be all elected by ourselves," he said.

Other demands mainly include lowering the cab rental fees paid to the companies, adjusting cab fares during wait time and allowing cabbies to rent low-rent public houses, Chen said.

Local authorities have said they would consider the demands of the cab drivers.

Hangzhou, which is famous for its scenic spots like the picturesque West Lake, has nearly 9,000 cabs.

China has seen a number of cab strikes across the country due to gas price hikes and worsening traffic jams over the past two years. The latest one on June 27 was in Zhengzhou, capital of Henan Province, where nearly 200 drivers aired their complaints about the unfair recall of their operator's licenses by a local cab company.