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Taxi fares in Beijing could soon be raised by 25 percent, according to a proposal submitted by the Beijing Transportation Bureau to the municipality's reform and development commission.

Charges could increase from the existing 1.6 yuan (20 US cents) per kilometer to 2 yuan (25 cents) to offset recent oil price hikes.

Published on the commission's website on Tuesday evening, the proposal estimates that about 80 percent of commuters who take taxis regularly would have to pay an additional 1 (12 cents) to 5 yuan (62 cents) per trip as a result. 

A public hearing on the proposal will be held on April 26. 25 participants have already been chosen from taxi companies, schools, research institutions, consumers' associations and factories.

In addition to the fare readjustment, the proposal also suggests establishing a mechanism to allow taxi fares to "float" with fuel price changes.

If the price of oil rises above 5.2 yuan (64 cents) a liter, taxi companies should offer drivers a certain amount in petrol subsidies; if it rises above 5.5 yuan (68 cents), a fuel surcharge of 0.5 (6 cents) to 1 yuan (12 cents) would be collected from passengers; if it rises above 6.1 yuan (75 cents), there would be another round of fare hikes.

Bureau figures show that the fare readjustment would affect about 63,600 taxis in the city, while the existing 3,000 taxis that charge 1.2 yuan (15 cents) per kilometer will be phased out by the end of this year.

Taxi fares in Beijing have remained fixed for more than five years, despite a rise in oil prices from 3.2 yuan (40 cents) a liter in late 2000 to the existing 4.65 yuan (57 US cents).

The government and taxi companies started giving drivers a monthly petrol subsidy of 300 yuan (US$37) last year to help cover extra costs. After oil prices jumped again at the end of last month, some taxi drivers were given an additional monthly subsidy of 150 yuan (US$18).

But the proposal suggests that these subsidies would stop if the fare readjustment is implemented.

While taxi companies are hailing the possible increase in fare, China Daily's random survey yesterday of six taxi drivers from six different companies showed that none of them was happy with the suggestion.

"A price rise will mean fewer customers," said Han Baozhu with the Yuyang Passenger Transport Company. "I figure I will lose at least 20 percent of my customers."

He said a cut in drivers' management fees that have to be given to the taxi companies would be a better way to offset the higher costs. He said his company collects a monthly management fee of 5,800 yuan (US$716) per car, while a new taxi only costs 90,000 yuan (US$11,100).

"They need only 15 months to take back the cost, but each car can be used for eight years."

A telephone survey by China's Social Survey Institute on 200 Beijing residents shows that 72 percent of them are against the possible fare rise. About 68 percent of the respondents considered 1.2 yuan (15 cents) per kilometer rate to be a reasonable price.

Wang Meng, who works with an IT company in Beijing, said she would consider taking a taxi less often if the fares increase. "If taxi fares rise, I may not travel by taxi as often as I do, or I will choose taxis without licenses which charge much less."
It is estimated that there are at least 70,000 unlicensed taxis operating in the city.

(China Daily April 20, 2006)