TAXI companies are updating their meters to add a fee when cabs are booked by phone after riders objected to the extra charge earlier this year. Most of the meters are expected to be updated by next month, cab companies said.
Shanghai Transport and Port Administration halted the extra fees before the Spring Festival to further assess the issue due to passengers' complaints.
But the taxi industry watchdog said yesterday the extra fee does not violate local pricing regulations and "will ease and partly solve demand-and-supply problems during rush hours."
The fee will be 4 yuan (65 US cents) for each booking, with 2 yuan given to taxi drivers and 2 yuan used to pay for dispatch centers, said the taxi companies.
As of now, only Dazhong taxi company charges the fee.
Qiangsheng Taxi Co, city's largest with 13,000 taxis, said they are upgrading meters but did not release an exact timetable for the charge to start.
The telephone booking operation, however, faces competition from smartphone apps that allow users to book taxis in an easier, more convenient way.
"The app is so convenient," said a rider surnamed Wu. "I can communicate with the driver directly."
Using the apps, taxis within a certain distances from the passenger will receive a signal to pick up a rider.
There are more than 30 such apps used on smartphones.
Phone apps allow negotiation
Passengers usually pay about 3 yuan for the app booking, divided among drivers and app developers. Passengers can also agree with drivers on the price they would be willing to pay for booking the ride.
In some cases, riders are willing to offer much more during rush hours, when available taxis are hard to find.
Taxi companies like Dazhong and Qiangsheng have developed their own smartphone apps. Dazhong charges riders 4 yuan to use their app.
Yu Guohua, an official with Qiangsheng, said their bookings collected from their app goes through their dispatch.
"It's just a new way of calling a cab," said Yu, adding that the volume of booking via the app is not large.
Local cabbies worry about fees turning off passengers.
"Some passengers with short trips may not book our cabs," said a cabbie.