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July 13, 2015

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Home » Business » Autotalk Special

The precarious spin of the wheels of fortune

By Anna Lu | July 13, 2015, Monday | Print Edition

Driving with temporary license plates is what many new car owners, like me, have to endure in Shanghai as we bide our time, hoping to strike it lucky in the government’s car-plate auction system.

Aiming to control traffic congestion, Shanghai limits its monthly auctions to no more than 8,000 plates. Last month, there was a record number of 170,000 bidders and a success rate of 4.3 percent. I may need to wait for two years to get a real shot.

Five months after I bought my first car, a Mazda Axela, I am driving in a state of limbo. Shanghai issues temporary plates for only a period of three months. Having run out of my time, I started to look for sneaky non-local temporary licenses on the underground market this month.

My current status unsettles my by-the-book family, who want me to suspend driving until I get a proper license plate.

“Imagine all the fun of car life we would miss if we chose to wait to get a car plate first,” I tell my parents. “This is about living for the moment.”

My stubbornness and sense of adventure help me stay positive when I am overwhelmed by such a hopeless spin of my wheel of fortune. The Shanghai car plate auction is an utter and brutal challenge to beat the odds: the highest bidder wins — or maybe not.

This trap of ambiguity well describes the municipality’s conflicting needs of keeping the price at a “reasonably” high level despite soaring demand while letting “market” forces bear the brunt of blame for price controls. The public is indeed hard to please.

During a crackdown on car plate speculation two years ago, a cleverly designed price-ceiling mechanism was introduced to keep every bidder in line, allowing a very limited price increase based on real-time average bids. The timing of making a calculated guess is now the key to winning, rather than how much money one is willing to pay.

“I should have bid 100 yuan less,” my friend Alex grumbled, after his final bet was rejected as too high in the last 10 seconds of last month’s auction. I wasn’t even fast-handed enough to submit a bid.

By June, Alex had failed in three consecutive auctions. For me, it was three quarters in a row. For the 100-yuan auction entrance fee we each pay every month, all we get is the dubious thrill of role-playing as traders.

Bidders who were lucky last month paid an average 80,020 yuan (US$12,891) for a piece of metal to attach to their cars. That would be more than enough to buy a decent small car or even to upgrade my Mazda Axela hatchback to a Mazda Atenza midsize sedan with top specs.

“This is crazy,” a foreign friend told me, marveling at my threshold of despair. “Not the price, but the fact you guys keep relentlessly trying.”

Some frustrated drivers eventually choose to put up with a cheap license plate from some jurisdiction outside of Shanghai, though that means they will be subject to some traffic restrictions when driving in the city. I broached that idea to my family but was met with a brisk rejection.

The idea of being treated like a second-class driver in your own hometown is unbearable. And the policy uncertainty over non-local car plates makes that alternative a bit of a gamble.

The hours when cars with non-local plates are barred from driving on Shanghai’s elevated ring roads have just been extended. What if Shanghai goes the way of Beijing one day and bans out-of-town cars from all downtown areas?

It pains me to do all these risk calculations just so I can drive my car. The biggest risk is policy uncertainty itself.

As a further break on burgeoning car traffic, Shanghai authorities are said to be considering a change that would scrap the current lifetime license plate in favor of one requiring periodic renewals.

Rumors about car restrictions in China always spark panic buying. Seeing the scramble for license plates and the soaring prices, I can feel a prevailing sense of insecurity behind the speculative mood.

Last year, when Hangzhou and Shenzhen became the seventh and eighth Chinese cities to cap local vehicle registrations, the new restrictions suddenly came into effect overnight.

If only there were an overnight solution to the problem.

The traffic control conundrum of the vehicle population explosion in China is just one of many examples of a country overstretching itself in leapfrog development to make up for lost years. Our system is not ready to take in all modern amenities, but our appetite is insatiable.

“If driving like a snail in a traffic jam becomes too annoying, people will get off the streets,” said my colleague Dong Zhen, who is an aficionado of market forces making everything all right. “But a laissez-faire approach risks the city plunging into chaos for a while.”

We both agree that there is no math model for mass psychology.

Rigid rules can trigger a rebellious spirit. A former colleague of mine, who is deeply frustrated with the lottery-style, car plate auctions, has been driving illegally on an expired temporary license for half a year.

One could get his driver’s license suspended and his car sequestered by the police for a month because of that. The same penalties apply to driving a car with a knock-off license.

My tolerance for risks overrode my doubts about the temporary non-local plate I bought this month. It is registered in Hunan Province, the birthplace of the late Chairman Mao.

The Great Leader’s theory of the “people’s protracted war” still lives on today. In my endless battle to succeed in Shanghai’s car plate auction, I have to maintain a certain guerilla-warfare determination.

“There are so many provinces where you can take turns sheltering your car and playing naughty,” Alex said, trying to keep my spirits up.

Placed against the windshields, temporary licenses are hard to get detected by cameras looking for traffic violations.

For a newbie driver like me, mistakes are part of the motoring game. But deep down, I know it’s all temporary.

Autotalk Special


 

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