Taxi Shanghai: Entrepreneurship and semi-colonial context

Abstract

Scholars of entrepreneurship can agree that ‘context matters.’ However, there is little consensus regarding the processes through which context and entrepreneurship are mutually constructive. While the influence of top-down forces on entrepreneurial action is well-studied, the ways in which ‘bottom-up’ entrepreneurial processes reshape context remain undertheorized. To help fill this void, this article explores the dynamic interplay between entrepreneurship and semi-colonial context in Republican Shanghai (1911–1949), by retracing the history of Shanghai’s ‘Taxi King’, Zhou Xiangsheng, and his enterprise, Johnson Taxi. Through context theorising, the article explicates mechanisms by which Chinese entrepreneurs reshaped semi-colonial Shanghai: how they launched informal taxi services that filled critical gaps in urban connectivity; combined heterogenous technologies to build city-wide taxi networks that traversed Shanghai’s many divides; and harnessed rising nationalistic sentiments to link the consumption of transportation services with political identity. We argue that through such mechanisms, Chinese entrepreneurs not only navigated their situated context, but actively re-imagined and transformed it.

Keywords:

• Entrepreneurship
• semi-colonialism
• China
• contextualisation
• transportation;
• Urban Studies
• Shanghai
• Automobiles
• Nationalism

Acknowledgements

The authors would like to express their appreciation to Christina Lubinski for the kind invitation to contribute to the special issue “Entrepreneurship and Transformation”; to Dan Wadhwani and Christina Lubinski for their insightful comments and guidance; to Jennifer Light and Walter Friedman who read and commented on earlier versions of the article; to the two anonymous reviewers who provided critical feedback and corrected a number of errors; and to the Business History Conference for the opportunity to present this work.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes on contributors

Shuang L. Frost is Postdoctoral Researcher and Adjunct Professor at Lloyd Greif Center for Entrepreneurial Studies at the USC Marshall School of Business. Dr. Frost received her PhD in Anthropology at Harvard University in 2020. Her doctoral dissertation “Moralizing Disruption: China’s Ride-Hailing Revolution” examines the interaction between social context and the platform economy. Her current work focuses on human-centric platforms, knowledge production, and technological innovation. Adam K. Frost is a PhD student in History and East Asian Languages at Harvard University who researches the history of entrepreneurship and government-business relations in modern China. His dissertation, “‘Speculators and Profiteers’: the Entrepreneurial Transformation of Socialist China (1957-1978),” uses unconventional historical sources and methods to explore the entrepreneurial origins of China’s economic transformation. Adam’s research has been supported by grants and fellowships from the Institution of International Education (Fulbright), the Social Science Research Council, the US Department of Education (FLAS Grant), Harvard Business School, Harvard’s Fairbank and Asia Centers, the Institute of Humane Studies, and the University of Southern California.

Notes

1 For how context shapes the productivity of entrepreneurship, see Baumol (1990); for how context shapes profit opportunities, see Kirzner (1978); for how context shapes decision-making, see Mitchell et al. (2000) and Aldrich and Cliff (2003).

2 (Rindova et al., 2009).

3 (Welter, 2011).

4 For notable exceptions, see Boettke and Coyne (2007) and Feldman et al. (2005).

5 (Cappelli & Sherer, 1991; Ucbasaran et al., 2001, p. 67, cited in George & Jones, 1997).

6 (Hansen & Wadhwani, 2014, p. 56).

7 (Bamberger, 2008, p. 839).

8 (Bamberger, 2008, p. 844).

9 (Aldrich, 2009; Bamberger, 2008, p. 175; Gephart, 2004, p. 455).

10 While scholars have made tentative steps in this direction by examining how foreign multinationals such as Jardine Matheson and the East India Company influenced the social, economic, and political environments of cross-border business by, for example, lobbying the British government to wage war against the Qing Empire, almost no attention has been paid to the role of domestic entrepreneurship in shaping context. See for example, Clegg (2016) and Connell (2006).

11 (Aldrich, 2009).

12 (Lu, 1999; Perry, 1993; Strand, 1989).

13 Excerpts of the aforementioned documents were compiled by the Shanghai Taxi Company History Group on 12 Oct 1989 in their ‘Guanyu Xiangsheng Qiche Gongsi chuangjian shijian de kaozheng qingkuang de baogao’ (Report on Research into the Conditions of the Founding of the Xiangsheng Taxi Company). The titles and dates of the original documents are as follows: Guo Shuxun, ‘Xiangsheng Qiche de qijia he fazhan’ (The Founding and Development of Johnson Taxi), 1963; Zhou Sanyuan, ‘Zhou Xiangsheng qingkuang’ (Details of Zhou Xiangsheng), 1968; ‘Guanyu Xiangsheng Gongsi jingying guanli fangmian de yixie qingkuang’ (Some Details about the Operation and Management of Johnson Taxi), 1979.

14 A similar usage was popularized in sinological scholarship by Jürgen Osterhammel who argued that the framework of semi-colonialism can be used ‘to make sense of a historical process in which ‘feudalism’ obviously disintegrated, but no significant transition to capitalism took place’. See Osterhammel, ‘Semicolonialism and Informal Empire’, 276.

15 (Fairbank, 1964 (1953)).

16 (Fogel, 2010).

17 See Shih (2001, p. 34), Barlow (1993), and Goodman (2000). See also Yang (2019), where Yang argues that the framework of ‘semi-colonialism’ helps explain the mutual constitutiveness of British colonial rule as well as draw productive comparisons between the historical experiences of China and India.

18 See for example the recent work of Anne Reinhart, Elisabeth Köll, and Shellen Wu who have respectively explored how semi-colonialism shaped the development of steamship networks, railways, and mining operations in China (Reinhardt, 2018), Köll (2019), and Wu (2015).

19 As historian Immanuel Hsu wrote, ‘Because [these treaties] were not negotiated by nations treating each other as equals, but were imposed on China after a war, and because they encroached upon China’s sovereign rights, they have been dubbed ‘unequal treaties’, which reduced China to semi-colonial status’. See Hsü (1990).

20 (Cochran, 2000).

21 (Wilkins, 1986).

22 (Köll, 2019, p. 20).

23 (Osterhammel, 1986, p. 300).

24 In 1943 all Western powers officially renounced their treaty rights in Shanghai and returned their concessions to the government of Wang Jingwei. However, the effects of extraterritorial governance would continue to linger well into the PRC. See Cornet (2004).

25 The Shanghai Municipal Council (gongbu ju) was formed in 1854. Until 1928, the organization prohibited Chinese from becoming members.

26 (Henriot, 1993).

27 In 1926, there were four French advisors, four other foreign advisors, and three Chinese advisors on French Council. See Cornet (2004).

28 In the 20th century the Shanghai Municipal Council began acquiring and merging utilities to unify services. See Chow (1950).

29 (Dillon & Oi, 2008).

30 For modern sewage systems and waterworks, see MacPherson (1987); for the function of night soil men, see Li (2015, p 151).

31 More recent scholarship has emphasized the pragmatism and self-interest of China’s ‘National Products Movement’. For example, in his study of Coca-Cola and the anti-foreign-goods protests of the 1940s, Yao Liang shows how Chinese beverage entrepreneurs used anti-foreign advertising as a tool to gain market advantage, even though their competitor, the domestic bottler of Coca Cola, was a Chinese-owned firm. In his most recent book, Parks Coble similarly revealed that during World War II, many Chinese entrepreneurs tacitly cooperated with both with the Japanese puppet government in Shanghai and the national government in Chongqing at the same time. See Yao (2017) and Coble (2003).

32 This quote is from Zheng Guanying’s seminal work Words of Warning to a Prosperous Age (盛世危言); quoted in Coble (1980, p. 27).

33 (Gerth, 2003).

34 ‘Zhou Xianghseng (1895-1974)’, Shanghai Gongyong Shiye Zhi, 2003, http://www.shtong.gov.cn/newsite/node2/node2245/node4516/node55036/node60615/node60617/userobject1ai49100.html; Zhou (2012).

35 ‘The New Astor House Building’, The North China Herald and Supreme Court & Consular Gazette, 20 Jan 1911; Brooke Astor, Patchwork Child: Early Memories (New York: Random House, 1993).

36 (Danganguan, 2008, p. 160).

37 (Zhou, 2012).

38 ‘Taxicabs in Shanghai’, The North China Herald and Supreme Court & Consular Gazette, 12 Apr 1911.

39 Shanghai Gonglu Yunshu Weiyuanhui, Shanghai Gonglu Yunshu Shi (Shanghai: Shanghai Shehui Kexueyuan Chubanshe, 1988), 59.

40 There are conflicting and incredulous accounts about the source of Zhou’s initial capital. According to the memoir of Zhou’s son, part of the money was a gift from two rickshaw pullers, who found a large sum of Russian rubles on the street. Another popular narrative suggests that the capital consisted mostly of Zhou’s gambling winnings. While we can only speculate about the real origins of these funds, there is at least strong evidence that Zhou later developed ties with leading figures in Shanghai’s underworld, most notably Du Yuesheng of the Green Gang. According to local legend, Zhou became part of Du’s inner circle and provided transportation services for all of Du’s family events. In exchange Du provided protection for Zhou’s taxi business. See ‘Reports on the Founding of Johnson Taxi’, based on oral history given by Zhou Xiangsheng, Qiangsheng Corporate Archives; Zhou (2012); Bainian Shanghai (2006).

41 Shanghaishi chuzu qiche gongsishi zhizu, Guanyu Xiangsheng Qiche Gongsi chuangjian shitongde kaozheng qingkuangde baogao, Qiangsheng Qiche Gongsi Danganguan, Shanghai, China, 12 Oct 1989.

42 ‘Lishi julunxia de chemafei de jinzhan’, Shenbao, no. 23289, 30 Dec 1938.

43 (Zhou, 2012).

44 Shanghaishi chuzu qiche gongsi dangshi bianxie zuzhi, Shanghai chuzi qiche renliche gongren yundong shi (Beijing: Zhonggong Dangshi Chubanshe, 1991).

45 ‘Wild Chicken Cars’ Still, Ply Nanking Streets: Taxi situation in capital city is analyzed’, The China Press, 03 Jul 1937.

46 ‘Wild Chicken Taxis Prove Canton Menace’, The China Press, 07 Sep 1933.

47 Elizabeth Perry and Lu Hanchao have shown how the rickshaw business increasingly became dominated by informal brokers, gangsters, and illicit entrepreneurs. By the 1930s, the number of illicit rickshaws outnumbering licensed public rickshaws two-to-one. See Perry, Shanghai on Strike; Lu, Beyond the Neon Lights.

48 Taitai Wansui!, written by Zhang Ailing and directed by Hu Shang (Shanghai: Wenhua Film Company, 1947), 35mm.

49 ‘Motor-Cars’, The North China Herald and Supreme Court & Consular Gazette, 09 Jan 1901; ‘The Tribulations of the Shanghai Bus Company’, The China Weekly Review, 27 Aug 1932.

50 For centuries China had boasted an expansive and efficient network of paved roads across its empire. But by the 19th century roadways had, as a result of civil war, budget constraints, and general neglect, fallen into systemic disrepair. Recognizing the problem that this posed for Chinese economic development, Sun Yat-sen, in the third volume of his seminal trilogy, A Strategy for Nation-Building (建国方略), advocated for the immediate creation of 100,000 miles of railways and 1,000,000 of paved roads. See Kim (2012, p. 67); ‘Inadequate means of travel hindrance to welfare of nation’, The North China Herald and Supreme Court & Consular Gazette, 10 Oct 1933.

51 (Chow, 1950, p. 12).

52 ‘City-Wall Demolition Scheme’, The North China Herald and Supreme Court & Consular Gazette, 17 Aug 1912.

53 (Steele, 1916).

54 As one commentator noted, the adoption of cars was ‘seriously hampered due to confinement to the ports and larger cities of the interior where passable highways are found’. It was only in the 1920s that there were concerted efforts to implement national road building projects; the total length of roadways grew from 1,158 kilometers in 1921, to 13,611 in 1923, to 30,550 in 1928, to 98,161 in 1933. See Zee (1934, p. 13) and Kingsnorth (1921, p. 12).

55 (Wright, 1908, pp. 495-496).

56 (Dikötter, 2006, p. 149).

57 ‘Display Ad 2 – no Title’, The China Press, 09 Aug 1935.

58 Report on ‘Forging Public-Private Partnership’, 25 Jun 1951, Shanghai Archives, Number: 13169-1-8-22.

59 In early June 1931, the exchange rate between the US gold standard dollar and the ‘Shanghai dollar’ was roughly 1: 4.7. This would imply a total value of $106,000 USD in 1936. If we convert this figure in terms of present day purchasing power, Johnson’s founding capital was equivalent to $1.6 million USD. See ‘Shanghai Dollar Makes ‘Face’ among Fellows with Spectacular Value Gain’, The China Press, 24 Jun 1931.

60 (Zhou, 2012).

61 (Weiguo & Liangcheng, 2012, p. 233).

62 Shanghai chuzu jiaotong shi vol. 1 (Shanghai: Shanghaishi chuzu qiche gongsi bianshizu, 1986), 3-31.

63 Bainian Shanghai, ‘Chuzuche dawang Zhou Xiangsheng’.

64 ‘Ford Hire Begins ‘City-Wide Chatter’’, The China Press, 11 Mar 1933.

65 ‘Johnson Garage Head Orders 30,000 Gadgets of Own Make’, The China Press, 01 Jul 1934.

66 Shanghai chuzu jiaotong shi, 3–36.

67 Ibid., 3–36.

68 ‘Zu qiche xuyong yingwen qianzi’, Shenbao, no. 20909, 21 Jun 1931.

69 ‘Gongbuju Foujue Xiaoxing Chuzuqiche’, Shenbao, 20 Nov 1936.

70 ‘Call ‘40000’ Now A Byword with Shanghai’, The China Press, 22 Apr 1934.

71 Shanghai chuzu jiaotong shi, 3–31.

72 ‘NYC Taxi and Ride-Share App Monitor’, Morgan Stanley Research, 11 Jul 2016. Accessed 26 Sep 2020, https://www.nyctaxinews.com/morgan_stanley_report_7_2016.pdf.

73 (Strand, 1989, p. 24).

74 (Chou, 2013, p. 30).

75 (Kingsnorth, 1921, p. 12).

76 Yuan, Muzhi, directed. Scenes of City Life (都市风光), Diantong Company Studio, 1935.

77 The Automobile Club negotiated with Standard Oil, Goodrich, and other firms to secure subsidized supplies of gasoline and tires as well as specialized insurance policies for their rate-paying members. The association also advocated for the construction of highways and the creation of public parking spaces, lobbied for the adoption of car-friendly traffic regulations, and advised the Shanghai Municipal Council on the issuance of licenses and the appropriate taxation of hire-cars. See ‘Automobile Club of China: Annual Meeting’, The North China Herald and Supreme Court & Consular Gazette, 19 Apr 1907, 161; ‘Automobile Club of China: A Successful Gymkhana’, The North China Herald and Supreme Court & Consular Gazette, 17 Apr 1909, 138; ‘Automobile Club of China’, The North China Herald and Supreme Court & Consular Gazette, 03 Apr 1915, 30; ‘Automobile Club of China’, The North China Herald and Supreme Court & Consular Gazette, 25 Apr 1925, 127.

78 ‘Shanghai News: School for Training Chauffeurs’, The North China Herald and Supreme Court & Consular Gazette, 08 Feb 1919, 845.

79 ‘Automobile School’, The North China Herald and Supreme Court & Consular Gazette, 1 Mar 1919.

80 ‘Automobile Club of China: Training of Chauffeurs in Shanghai’, The North China Herald and Supreme Court & Consular Gazette, 29 Mar 1919, 857.

81 ‘Shanghai News: School for Training Chauffeurs’, The North China Herald and Supreme Court & Consular Gazette, 08 Feb 1919, 845.

82 This potential for upward mobility was of great concern to many Western car owners, who viewed their drivers more as bonded serfs than employees. As one car owner wrote in a revealing op-ed: ‘Take it that I send my driver to the school at a cost of $50; he turns out in a month’s time with a swollen head and an idea that he will then be worth a further $5 per month, and if I refuse to pay his wages, he would probably find that he could get the increase elsewhere, so that I would have paid $50 to perfect his knowledge and lose him almost immediately’. See ‘Automobile School’, The North China Herald and Supreme Court & Consular Gazette, 01 Mar 1919.

83 Zhongyang Qiche Xuexiao, founded by Chinese national Yu Lexing. And the principal and manager were all Chinese nationals. Shanghai Chuzu Jiaotong Shi.

84 ‘Hire Car Owners Association’, The North China Herald and Supreme Court & Consular Gazette, 23 June 1928.

85 Although the majority of founding SHCOA companies were Chinese, both the founding president and treasure were American businessmen. Shanghai Chuzu Jiaotong Shi, 3-7.

86 This association was sanctioned by Shanghai Municipal Social Bureau (上海市社会局, 1928-1949). ‘Chuzu qicheye gonghui kai chengli dahui’, Shenbao (1872-1949), no. 20832, 03 April 1931; Shanghai Chuzu Jiaotong Shi, page 3–7.

87 (Tuchman, 1970).

88 (Bainian Shanghai, 2006).

89 ‘No More Taxis to Northern Areas’, The North China Herald and Supreme Court & Consular Gazette, 22 March 1939.

90 ‘Bainian Qiangsheng’, Shanghai Qiangsheng Holding Co. LTD., 2013.

91 Si is the number four and wan is 10,000 in the Chinese counting system.

92 Shanghai chuzu jiaotong shi, 3-20.

93 ‘Zhou Xianghseng (1895-1974)’, Shanghai Gongyong Shiye Zhi, 2003, http://www.shtong.gov.cn/newsite/node2/node2245/node4516/node55036/node60615/node60617/userobject1ai49100.html.

94 (Bainian Shanghai, 2006)’.

95 ‘Call ‘40000’ Now A Byword with Shanghai’, The China Press, 22 April 1934.

96 Interview with a local Shanghainese resident, Dec 2018.

97 ‘80-Cent Hire Car Charge is Said Profitless’, The China Press, 24 Aug 1935.

98 The International Settlement remained outside of Japanese control until Japan’s attack on Pearl Harbor in 1941, when the British and American troops stationed there surrendered after being taken completely by surprise. Because the French Vichy government considered itself neutral in the control, the French Concession was allowed to remain under the control of the French. See Cornet, ‘The Bumpy End of the French Concession and French Influence in Shanghai, 1937-1946’.

99 Shanghai Public Infrastructure 1840-1986 (Shanghai Gongyong Shiye). 1987. Chapter Four ‘Shanghai Hiring Transportation’, 53.

100 ‘Chuzu qiche po tie qizhi’, Shenbao, no. 23732, 31 Mar 1940; ‘‘Ta Tao’ Taxi Tax News to S. M. Council’, The China Press, 21 Apr 1938.

101 ‘Baby Taxi Service’, The North China Herald and Supreme Court & Consular Gazette, 15 Jun 1938.

102 ‘3 Groups Voice Opposition to Midget Taxis: Bic Car Operators, Ricsha Owners and Pullers Protest’, The China Press, 26 Jun 1937.

103 ‘Taxi Fares: A Company Explains’, The North China Herald and Supreme Court & Consular Gazette, 15 Jan 1941.

104 ‘Bainian Qiangsheng’, Shanghai Qiangsheng Holding Co. LTD., 2013.

105 ‘Zhongguo Lianye Qiche Gufen Youxian Gongsi choubeichu gonggao’, Shenbao, no. 24585, 28 Aug 1942; ‘Shanghai gonggong zujie gongbuju bugao’, Shenbao, no. 24624, 09 Oct 1942.

106 ‘40000 Chuzu sanlun keche qishi’, Shenbao, no. 24639, 24 Oct 1942.

107 (Bainian Shanghai, 2006; Zhou, 2012).

108 (Zhou, 2012).

109 ‘Jiefangqian Siying Qiye’ (Private Enterprises before the Founding of PRC), Shanghai Gongyong Shiyezhi, http://www.shtong.gov.cn/Newsite/node2/node2245/node4516/node55032/node55130/node55140/userobject1ai42418.html.

110 ‘Guoying Qiye Xuanjie’ (State-owned Enterprises), Shanghai Gongyong Shiyezhi, http://www.shtong.gov.cn/Newsite/node2/node2245/node4516/node55032/node55130/node55140/userobject1ai42419.html

111 (Zhou, 2012).

112 Zhou Xiangsheng’s younger brother Zhou Sanyuan, who was acting chairman of the company, was removed from his position because of his capitalist status. But he was soon brought back when the government realized that running a large taxi operation takes real managerial expertise.

113 Shanghai Jiushi, ‘Rang Wo Zhibo Sigeling’ De Qianshijinsheng’, Shanghai Jiushi Co. LTD. 28 Nov 2018.

114 ‘Gufenzhi Qiye’ (Shareholding Companies), Shanghai Gongyong Shiyezhi, http://www.shtong.gov.cn/Newsite/node2/node2245/node4516/node55032/node55130/node55140/userobject1ai42422.html