Shanghai cab fare rises 10%

10:02, October 12, 2009      

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A taxi driver exchanges the price tab of his car in Shanghai, east China, Oct. 11, 2009. Local government increased the start price of taxi fee from 11 to 12 Yuan RMB, while at night the start price reached 16 Yuan RMB. For each additional kilometer the fee is 2.40 Yuan RMB comparing with the original 2.10 Yuan RMB per kilometer. (Xinhua/Pei Xin)

Linking taxi fares in Shanghai to oil prices has led to a 10 percent increase in taxi fares as of Sunday.

The fare at flag fall went up from 11 yuan to 12 yuan, while cost per kilometer was increased from 2.10 yuan to 2.40 yuan. The fuel subsidy given to the city's 40,000 cabs was cancelled after the price change.

The cab fare will be adjusted annually to reflect fluctuations in oil price, according to the city's development and reform commission and the Bureau of Commodity Prices (BOCP).

Beginning next month, taxies will have to run on 93-octane gasoline, which is more environmentally friendly, with a price 0.85 yuan higher than the 90-octane fuel which is currently used.

When Beijing implemented a similar policy that banned 90-octane in 2006, business got harder for taxi drivers. It took time for people to get used to paying the higher price, according to a Beijing taxi driver surnamed Shi.

"Shortly after the fare increase, many passengers started taking the bus or the subway," said Shi, "but they came back eventually."

Gasoline in Shanghai is currently slightly cheaper than Beijing's, but a price increase is expected as 90-octane goes off the market.

Fuel expenses amount to 30 percent of the total cost of operating a taxi, according to Yu Hong, a Shanghai taxi driver.

Every Beijing taxi receives about 1,500 yuan per month from the government to cover the costs of the price increase. But the subsidy doesn't cover the whole cost, so companies and drivers have to shoulder the burden, said Shi, the Beijing driver.

While in Shanghai, a monthly oil price subsidy of 500 yuan is now a thing of the past, which plus the fact that some price-sensitive consumer would turn to the bus or subway, would be bad news to taxi drivers, said Yu, the Shanghai driver.

"I won't take taxis if I'm going a long distance," said Zhang Wenqing, a Shanghai-based Siemens employee, "But if I'm going around three kilometers, the cost is only one yuan more, so it makes little difference to me."

According to the Municipal Transport and Port Authority, rides shorter than three kilometers will see an increase of about 9.1 percent, while people going over 10 kilometers will pay 12 percent more.

Source: Global Times

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