More than 100 drivers, mostly from Henan province, and their families, protested demanding higher wages. They were 1,500 on Monday morning.
Cabbies in Hangzhou say they make about 500 yuan a day (US$ 75), but pay out nearly 80 per cent in fuel and vehicle rental fees.
In Hangzhou and many other cities in the mainland, taxis are controlled by companies or individuals that hold operating licenses. They take rents from the drivers, growing numbers of whom are migrants from poorer parts of the countryside willing to accept low wages. However, increasing traffic jams and unlicensed taxi operators cut into their profit when the average metre rate is 1.5 per kilometre.
With China's inflation at a three-year peak of 6.4 per cent in June, many drivers say they are losing money. This has led to a rise in protests and strikes in the big cities.
Most recently, on 27 June, several hundred drivers in Zhengzhou went on strike after cab companies blocked drivers over licences.
Cabbies in Zhengzhou staged a strike for the same reason in April. Their colleagues in Zhanggiu and Xingping did the same in June, in Qionghai on 10 May, in Foshan and Mengzi in April, in Lanzhou in March.
In Zhengzhou, thousands of taxi drivers went on on strike on 10 January to protest the city’s decision to abolish the long-established system of six work days, one rest day, to meet rising demand for taxi services.
Now Hangzhou authorities have promised to raise taxi fares by the end of October and have offered of a temporary fuel subsidy of 1 yuan per trip (US$ 0.15), which many cab drivers have said was too little.
For many, the whole licensing system should be revised, and licenses should be taken away from companies. A cap should be put on vehicle rental costs and municipal police should be reined in.
However, experts believe the authorities are not really interested in solving the problem, because taxis are usually driven my migrant workers.
"They tell us, 'if you are so unhappy, why don't you go back’,” one driver said.
In the smaller city of Xianning (Wuhan), several hundred drivers went on strike for nearly a month, beginning on 16 December after the city government announced that cab licenses would be rescinded after ten years, and that the drivers’ 30,000 yuan to 40,000 yuan license fee would not be returned.
Media reports and the online grapevine said that about one hundred drivers were taken into custody by the police to stop the protest.