Ministry Wants To Institute Taxi Cull

[Mulboyne]

Yomiuri: Moves afoot to limit numbers of taxis /Transport ministry hopes to put a stop to reckless driving and scramble for fares
A Construction and Transport Ministry task force has formally released a draft proposal calling for the introduction of a system to reduce the number of taxis in areas that have seen an excessive rise in cab numbers. Under the system, the ministry would collaborate with taxi operators in targeting specific areas with a surplus of taxis and allow numbers to be cut if local governments deemed it appropriate. The ministry plans to select 110 places nationwide, including Osaka, Sendai and Tokyo, as designated areas. The ministry will submit related bills to the ordinary Diet session that will convene at the beginning of next year, with the aim of putting the system into effect from fiscal 2010...The reasoning behind cutting taxi numbers is to curtail a rise in inappropriate practices in the excessively competitive taxi industry. However, some fear the system will protect operators while leaving passengers with a poorer service. In fiscal 2006, there were 273,740 taxis nationwide--an increase of about 15,000 cabs from before regulations were relaxed in 2002 to make it easier for people to enter the market as a new taxi operator. Despite this rise, the number of passengers has remained at about the same level. The average income for drivers has dropped dramatically, leading to a scramble for passengers and reckless driving -- giving rise to fears over safety...In designated areas, the ministry will strengthen regulations to reduce the number of taxis. But it has no legal power over operators that refuse to cut numbers, meaning if some operators do not agree to reduce taxi numbers, other operators might think they will lose out if they are the only ones to do so. "I don't expect an immediate or practical effect," a spokesman for a major taxi firm said...more...

pix jamesjustin

[Mulboyne]

Asahi: Taxi industry reform

The Cabinet will shortly approve a bill to reverse taxi industry deregulation introduced in 2002, which led to a sudden increase in taxi operators and cabs and flexibility in their fare setups. The overhaul will enable the government to restrict the number of new entries as well as the size of taxicab fleets. The deregulation caused a taxi glut in some cities and took a substantial chunk out of the wages earned by taxi drivers. These trends need to be addressed, but the question is how. The bill aims to designate cities and areas with surplus cabs as "special districts," where the government could cut the number of cabs and urge operators to merge or explore other means for improving business. Measures such as these, the government says, would streamline the taxi industry and increase wages for drivers. The opposition Minshuto (Democratic Party of Japan) is also devising a plan, under which one proposal is to undo the partial liberalization of taxi fares and go back to a uniform fare structure for each region. Where taxi industry regulations are concerned, then, it seems Minshuto is approaching the problem with the same attitude as the government and the ruling coalition.

We question whether these planned measures would spell a return to the days of "protectionist administration"--when the government excessively regulated the taxi industry, encouraging taxi operators to go concession-hunting. Reducing the number of taxis and blocking newcomers will not necessarily help taxi drivers. A better alternative, we believe, would be to ensure that regulations protecting their wages and working conditions are properly enforced. The wage structure for taxi drivers is commission-based. The post-deregulation cab glut shrank fare earnings and consequently reduced drivers' wages. But this did not hurt taxi companies much. Decreased fare earnings per cab only meant lower wages for the drivers. To bolster their earnings, taxi companies tended to expand the size of their fleets, creating a drastic oversupply.

Our proposal is to raise the fixed-sum base salary for drivers, introduce more strict rules on working conditions to ensure safe driving, and create a system under which taxi companies will suffer if they continue to expand their fleets. Those measures should hopefully guide unruly companies to settle on a fleet size that matches demand. The transport ministry is reportedly planning to appoint a study panel this month to explore alternatives to the commission system for drivers. If this is the case, the correct procedure should be to await the panel's decision, and only then review the regulations envisioned by the bill.

The taxi industry has been a symbol of the government's deregulation policy. Amid the current global recession, some of the reforms initiated by former Prime Minister Junichiro Koizumi face growing criticism. This is giving momentum to the present move to undo the taxi deregulation. However, just as deregulation is not all good, it is not all bad either. Taxi cabs are a convenient means of public transport. As society continues to gray, they will become even more indispensable. Ultimately, the issue boils down to what needs to be done to make taxi cabs more convenient for everyone. Going back to the days of government protectionism is no way to achieve that end. It is important, we believe, that operators compete with one another to make their services attractive to users. Undoubtedly, the biggest problem is that the "customer-first" mentality is sorely lacking in the ongoing debate on taxi industry reform.