Private cars are no longer able to be driven until owners purchase a local license during the monthly license plate auctions

Private cars are no longer able to be driven until owners purchase a local license during the monthly license plate auctions.Commencing in 2011, Shanghai has implemented a system of auctioning off these registration rights, which have increased in value over the past 10 years from US $7 600 in 2013 (X. Chen J.Zhao, 2013) to over US $14 000 in 2017 (The Economist, 2018), which is often more expensive than buying a car itself. The system entails an auction held on the third Saturday of each month, in which about 8,000 plates are put up for auction. In order to bid for these registration plates, the applicant must go to a branch of Bank of Communications to register, with a 2,000 yuan (US $302) deposit compulsory to get an account number and a computer disk (used to connect to the bidding system at the action). At the auction, the applicant has only three chances to bid within the next 6 months, which cost 100 yuan (US $15) each. (Wall Street Journal Blog, 2013). According to statistics provided by the Information Office of Shanghai Municipality, the probability of being successful in purchasing a registration plates is less than 4.3%, forcing the vast majority of car owners to wait for other auctions, or to turn to other transport options. The loophole of registering vehicles outside of Shanghai was also eradicated with tightened laws in April of 2015 forbidding cars registered outside Shanghai from driving on elevated roads during peak hours (7 am to 10 am and 4 pm to 7 pm) (W.Han, the Global times, 2015). This system not only limits the number of cars on the roads, thus reducing congestion, but acts as an incentive for the public to turn to alternate transport systems, such as public transport, due to the unaffordable prices.