Taxi Driver Online

Law to reduce taxis must not hamper competition, services


The Yomiuri Shimbun

The toughening of regulatory measures for the taxi industry could hinder fair competition among operators and adversely affect services for users. We are concerned about the negative impact that may result from a revision of the law regulating the industry.

A bill, jointly sponsored by the Liberal Democratic Party, New Komeito and the Democratic Party of Japan and aimed at “normalizing and reinvigorating the taxi industry,” was recently enacted. The revised law is aimed at designating “special areas,” such as central Tokyo and the downtown areas of other major cities, that will be subject to mandatory taxi reductions because the number of cabs is regarded as excessive.

New entries into the taxi industry and fleet expansions will be prohibited for a certain period under the law in the special areas.

A council comprising taxicab operators, the municipal government concerned and other entities in each special area is to formulate plans aimed at reducing taxi fleets and restricting business hours. The legislation empowers the government to issue orders to carriers, including owner-driver taxis, that fail to comply with these plans.

The revised law also has introduced a system to set permissible ranges of fares by areas, enabling the government to order noncompliant carriers to change their fares.

The tough restrictions on competition and setting the bar high for new entrants into the taxi business appear to be in response to appeals from existing taxicab companies.

The taxi industry was liberalized in 2002 to allow new entries in the field, but a law enacted in 2009 called on taxi operators to voluntarily reduce their fleets on the ground that the soaring number of taxis had resulted in excessive competition. Some companies, however, failed to reduce their fleets as the law had no binding power.


Self-help efforts essential

The LDP, Komeito and DPJ argued that unless fleets were reduced drastically, cutthroat competition among taxi firms would intensify, leading to a drop in income for taxi drivers because they work on a commission basis and a continuation of long work hours.

Improving working conditions of taxi drivers should be urgently addressed, as their work hours are significantly longer and their wages lower compared to workers in other industries.

Working conditions could be improved primarily through taxi companies’ efforts to boost profits through cost-cutting measures.

We fear the tougher regulations in the revised law will not lead to a reduction in taxi fares, and the possibility of a deterioration in services could produce an adverse reaction from users.

If the taxi industry became solely dependent on the regulatory measures and became less competitive, potential passengers may be inclined to shy away from using taxis, aggravating the business performance of taxi operators even further.

In putting the law into practice, the government should bear in mind the need to handle matters carefully through such means as reducing the list of competition-restricting “special areas.”

It is also extremely important to carefully determine whether taxi fleets are excessively competing in certain areas.

By laying down objective and intelligible criteria, the government must ensure taxi fleets’ impartiality and transparency.

Taxi operators have started using smartphones so they can dispatch taxis located nearest to a prospective passenger. In addition, an increasing number of operators are equipping their taxis with rails and other means to allow aged users to get into and out of the vehicles more easily.

It is important for taxi operators to make full use of their ingenuity and redouble competitive efforts to attract passengers.

source: http://the-japan-news.com/news/article/0000839718

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