Higher taxi fares coming to Tokyo

October 7, 2007
By Ken Worsley

After ten years without a fare hike, Tokyo’s taxi rates are looking to be set to increase by 9% in December. The basic minimum fare will be raised from 660 to 710 yen. Taxi companies have been requesting the hikes since last year, citing increased fuel costs as pinching profits and preventing wages from increasing.

We’ve been following this story for a bit. Back in April, Economic Minister Hiroko Ota told reporters, “Accountability to consumers should be a priority when raising public service costs. We need to consider whether the taxi industry has truly made efforts to curb its inefficiencies.” Other government officials voiced opposition to the fare hike, and many speculated that the ruling LDP would pressure the Transportation Ministry to not allow fare hikes before July’s Upper House election.

In June, a Yomiuri article told us that the Transportation Ministry wanted the hike to happen, and that Yasuhiro Machitori, the general secretary of the National Federation of Automobile Transport Workers Unions, blamed aggressive liberalization and competition for the declining number of taxi passengers.

At that time, it was said that further economic improvements could make conditions favorable for a rate hike. Of course, since then we’ve seen negative GDP growth and reductions in capital spending. The Upper House election, however, is over. Once taxi rate hikes fly through, how far off is a sales tax hike?

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