Chen also said price reform will encourage more passengers in the city to take other forms of public transport and ease difficulties in hailing taxis, especially during the rush hour.

According to a regulation released on Tuesday, the city government will ensure that taxi drivers benefit from the fare rise. It did not elaborate.

In Beijing, a driver running a taxi on his own must pay 5,175 yuan ($838) a month as a company franchise fee. For a taxi run by two drivers operating 12-hour shifts, this fee is usually more than 8,000 yuan.

The city government said it will also encourage the hiring of taxis through phone calls or smartphone apps.

It will establish a taxi hailing platform and set up a number of dispatch points in the downtown area and central business district, plus 600 taxi stops outside residential communities as part of the plan to ease the taxi shortage, according to the regulation.

The municipality will also standardize smartphone apps that enable commuters to hail available taxis nearby. The additional fees for hailing a cab through the apps will be set and the current practice where drivers bargain with commuters over fares will be changed, the Beijing Daily reported, citing transport commission insiders.

Most taxis in the capital operate by picking up commuters on the streets, with at least three service hotlines run by different taxi companies.

A smartphone app now accounts for more than 30 percent of business for driver Li Guang.

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