Last week several blogs asked the question what happens with the RMB 30 deposit that you pay for your Shanghai transportation cards (these cards that you can use to pay for the metro, bus and taxi). The argumentation was that this money (@ 15 millon cards this is RMB 450 million) should generate a lot of interest, and people wanted to know what that money is used for. Even the Shanghai Commission on Consumer Rights and Interest Protection got involved, and argued for “the right to know”. Suggestions for the usage like ‘for mistresses’ or ‘for karaoke’ were made.
As a business person I did not really take the posts or comments too serious, because even every business student should know that this kind of cash is normally used for business operations (it reduces your cost of capital for investments, and it makes is possible to lower operational costs). And strangely nobody even thought of a much bigger chunk of money: the money people store on their cards. That’s on average much higher than RMB 30, probably more around RMB 100, meaning that an additional 1.5 billion in cash is available to the metro company.
But it seems the blogs had some effect. This Sunday I wanted to take the metro and realized I forgot my card, so I bought a new one. And to my big surprise they suddenly reduced the price of the cards, I only had to pay RMB 20 for a new card! And a much nicer one than the old one, a red card commemorating the Long March 70 years ago.