Taxi companies in Chongqing agreed to reduce administrative fees for their drivers on Wednesday, following a two-day strike earlier this month.
The fees will be reduced by 50 yuan ($7.30) per day, the firms said.
It can cost drivers 380 yuan to 480 yuan a day to use a cab from a taxi company, according to a China Daily field investigation about 10 days ago.
This unfair division of the returns between drivers and their companies, from which they rent their cabs, was reported to be the key reason for two-day strike in Chongqing.
Licensed drivers complained that was too much, Li Jun, executive vice-chairman of the Chongqing federation of trade unions, said on Wednesday.
The agreement is retroactive from Nov 5, two days after the strike began in the downtown area.
It comes with a stipulation: Drivers will only have their fees reduced after performance evaluations, Li said, without elaborating.
The federation invited 10 cab company representatives and 21 driver representatives to negotiate management fees on Tuesday, he said.
Cabbies showed their support for the new rule.
"For sure, it's good news for us," He Xianming, a taxi driver, said.
Under the new policy, He and his partner, who run the same taxi in two shifts, can earn an extra 25 yuan a day.
"The new policy could bring in another 500 yuan a month," He said.
But he said he hopes the government also raises the flag-down price, which is now 5 yuan, lower than most other major cities.
Six yuan would be acceptable to everyone, he said.
There are about 8,000 cabs in Chongqing, belonging to 34 taxi companies.
Cabbies launched a two-day strike on Nov 3 to protest several issues, including insufficient supplies of compressed natural gas, competition from unlicensed cabs, high fines for traffic violations, and the unfair division of fares between drivers and companies.
On Nov 10, Chongqing launched a campaign to crack down on unlicensed cabs.
Illegal drivers will be fined 30,000 yuan to 100,000 yuan and their earnings will be confiscated.
In another development, police yesterday arrested a cabbie who threatened to blow up a bridge in Chongqing.
According to China News Service, the driver, strapped a belt of mineral water bottles filled with gasoline to himself and stood on top of his cab on a bridge in the Beibei area at about 7:40 am.He threatened to blow up the bridge, a firefighter said.
He gave up his protest after two hours of negotiation with police, and was then arrested.