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Beijing taxi fare rise hardly seen as all-win solution

(China Daily)

09:07, May 24, 2013

Taxi fares in Beijing look set to be raised not just the starting price and per-kilometer charge, but also the charge for waiting time.

No party is happy with the situation at present. Cabbies are cursing their low pay and high levies, customers complain about the difficulty of finding a cab, and even the government-protected monopoly - the taxi companies - are crying foul.

The proposed hike in fares is said to be an all-win solution, but whether higher fares will proportionally increase the incomes of taxi drivers and at the same time ease the difficulties people face in getting a taxi during rush hours remains to be seen.

Taxi fares have remained unchanged for seven years in the capital, while the per capita income has increased 60 percent. It is unfair that a taxi driver has to work more than 10 hours a day just to earn around 4,000 yuan ($646) a month. Under the current fare structure, many drivers choose to stop working during rush hours as they lose money when they get stuck in traffic.

The official logic is that higher fares will correspondingly increase cabbies' incomes. Maybe. Maybe not.

What if the higher fares scare away customers? What if an increasing number of customers choose to take unlicensed taxies, which are usually cheaper, instead?

It is justifiable to raise the fares in order to increase taxi drivers' incomes, but given the fees they have to pay their companies, any increase is already compromised, and even more so if companies increase the fees drivers have to pay.

So the government must make sure that taxi companies will not steal the raise, which is intended to benefit the drivers, and crack down on unlicensed taxies.

After the proposed fare increases come into effect, passengers will pay more than 50 percent when a taxi is running at less than 2 km an hour. It is likely that some customers will choose to take a bus or drive instead of taking a taxi.

If that is the case, some taxi drivers may choose to stop working during rush hours, as they did before, since there will be fewer customers.

Something more will need to be done to solve such problems even after fares are raised.

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