Hangzhou, capital of east China's Zhejiang Province, will call back the 30 Mercedes Benz taxies that have been running at a loss since they joined the city's taxi fleet a year ago.

The luxury cars, a novelty for citizens but a headache for drivers, will quit the taxi team before the end of this year, a source with the city's road traffic management bureau confirmed.

He said the cars will be resold to local businesses, including wedding service companies that offer luxury car rides to newly-wed couples and their families to wedding receptions.

High running cost and lack of passengers are the main causes of the city's abortive plan to "facelift" its image with luxury taxies, he said without giving his name.

The rental fee for a Mercedes taxi is around 11,000 yuan (US$1,375) per month, excluding gasoline spending, while a Passat is leased for 7,000 yuan (US$875).

Despite the high running cost, a Mercedes taxi charges 12 yuan (US$1.5) for the first four kilometers, just slightly higher than the 10 yuan (US$1.25) for other taxies. But still, very few people are willing to spend that extra 2 yuan (25 US cents).

On January 7, a group of seven taxi drivers fled Hangzhou with the Mercedes they leased back to their hometown in central Henan Province, protesting the high running cost that even topped their income.

The incident, followed in a month by the runaway of 18 other taxi drivers with Chinese-made luxury car "Red Flag," questioned the need for high-end taxies in the local market, particularly now that China aims to build a thrift, resource-efficient society.

A sociologist said it's not at all surprising for the luxury taxies to be running in the red or to have to quit from the market. "Don't expect any man in the affluent Zhejiang Province will readily take a Mercedes," said Professor Liu Zhijun with elite Zhejiang University. "Besides, I think it takes more than luxury cars to improve a city's image." 

(Xinhua News Agency February 27, 2006)