Thousands of taxi drivers in southwest China's Chongqing city were striking over high operating costs, low fares, gridlock traffic and fuel issues, an employee at the Chongqing Hongqiao Taxi Company told AFP.

Drivers were also unhappy over the government's failure to rein in unlicensed taxi operators who were stealing fares away, the employee surnamed Tang said.

'There are several reasons for the strike, first off long queues at gas stations - it takes taxi drivers one to two hours just waiting at the gas station', Mr Tang said by phone.

'The flag-fall price for taxis has also remained unchanged for almost eight years. Compared with other large cities, five yuan (S$1.07) is very low.'

As the strike began early on Monday, taxi drivers smashed the windows of cars belonging to colleagues who tried to cross picket lines, and passengers were pulled out of those vehicles, Xinhua news agency said.

At least 20 vehicles, including three police cars, were smashed, it said.

'All cab drivers agreed to stop work,' Xinhua quoted an unnamed man in a crowd of about 100 drivers smashing cars as saying.

'We damaged the cabs of those who didn't keep their word.'

However, employees at both the Hongqiao taxi company and the Chongqing Taxi Company told AFP that many cabbies did not want to strike, but were afraid their cars would be smashed up if they worked.

'Officials are having meetings right now to seek solutions to the problem,' a spokesman with the Chongqing government told AFP by phone, while refusing to identify himself or comment further on the strike.

Chongqing has a population of about 31 million people, with just over five million living in the urban district.

Online Chongqing chatrooms largely expressed sympathy for the strike, but some angry postings complained about the lack of taxis on the streets.

'Fundamentally the root of the problem is that the government and the taxi companies take too much money, our costs have all along been too high,' a Chongqing cabbie said in a chatroom posting on Netease.com.

'Every day I have to hand over 200 yuan (in car payments alone) to the cab company.'

After pleading from government-owned taxi companies about eight percent of Chongqing's 9,000 urban taxis were back on the road by Monday afternoon, Xinhua said.

That was after thousands of passengers were left stranded during the morning rush hour when taxi cabs were absent from the city streets and people could not find transport to work or to the airport and train station.

Strikes are rare in China, where union activity is strictly controlled by the Communist Party.

Employees in any industry are only allowed to belong to the party-controlled All China Federation of Trade Unions. -- AFP