Beijing has declared a preference policy for taxi companies that choose to scrap their old cabs ahead of a mandated schedule. Beijing now has around 70,000 taxis, the majority of which are old and outdated models.

Mandatory scrapping of old and outdated taxis is scheduled for the period between January 1 and December 31, 2006.

However, the Beijing financial, environmental protection and transport committee authorities jointly issued a notice on Monday that if a taxi is scrapped before the end of June this year, its owner will be given a 4,000 yuan (US$480) one-off payment.

Taxis, which can travel more than 10,000 kilometers each month, are usually required to be scrapped after eight years.

From a taxi company's point of view, receiving a one-off payment of US$480 might not be that attractive.

Most of Beijing's taxi drivers are employed by taxi companies, and each driver must pay the company 4,800 to 5,400 yuan (US$585-658) each month for the use of the taxi.

But taxi companies are keeping tightlipped about the policy. "I haven't heard about the discarding taxi measures from my boss," said a source with the Beifang Taxi firm, which owns about 3,000 taxis.

Beijing, home to nearly 70,000 registered taxis, has 130,000 drivers. It is the largest taxi market, accounting for 8 percent of the taxis in China.

In 2004, Beijing taxis carried about 550 million passengers with a sales volume of 8.2 billion yuan (US$1 billion). The taxi industry contributed almost one-fifth of the capital's fiscal revenue.

Of Beijing's 70,000 taxis, more than a seventh have been replaced by new models, such as the Hyundai Sonata and Elantra, the Volkswagen Santana 3000, and the new Jetta.

It is estimated that another 15,000 taxis will be replaced by the end of the year, some 25,000 next year, and all of the city's old taxis should be replaced before the 2008 Olympic Games.

(China Daily May 11, 2005)