TOKYO (The Japan News/ANN) – The Transport Ministry began a trial system in Tokyo this month in which fares charged by taxis to pick up customers fluctuate based on demand.
Three taxi companies are participating in the trial, which is aimed at making services more customer friendly and increasing ridership by allowing taxi firms to flexibly set rates.
Ridesharing services, in which ordinary people pick up and transport customers using their own vehicles, have proliferated overseas.
Concern that ridesharing could be introduced to Japan prompted the ministry to act, as it aims to maintain taxis as a means of transportation in local areas by improving services and enhancing the competitiveness of the domestic taxi industry.
The Land, Infrastructure, Transport and Tourism Ministry launched the trial system on October 1 in cooperation with the three taxi firms, including Nihon Kotsu group.
During daytime on Sundays or other days when there are few customers, the ¥410 pickup fare is dropped when customers call a taxi to a specified area, such as Minato Ward, through a smartphone app.
The two other participating firms, Daiwa Motor Transportation group and Kokusai Motorcars group, set fares ranging from ¥0 to ¥910 to pick up customers.
Hotels and airlines often utilise sliding fare systems in which rates rise during busy periods. However, the trial system marks the first time a domestic taxi firm has adopted such flexible rates.
Additionally, taxi firms will consider applying flexible rates to transport fares in the future.
The ministry and taxi industry also plan to begin the use of coupon tickets, which can be purchased in advance and used to obtain discounted fares for rides to and from specified locations.
Feasibility studies on coupon tickets will be conducted in seven areas, including Kitakyushu and Tachikawa, Tokyo. The system will mainly target elderly people going to hospitals and children attending cram schools.
Riders halve over 20 years
Alarm over the possible emergence of ridesharing prompted the ministry and taxi industry to explore countermeasures.
Ridesharing is banned in principle in Japan as it is an unlicenced taxi service. It has gained popularity overseas, however, as a cheap and convenient means of transportation, with operators of the service seeking entry into the Japanese market.
The latest efforts by the ministry and domestic taxi industry are aimed at countering this possibility by enhancing the convenience of taxi riders.
The taxi industry has faced a worsening business environment in recent years.
According to the ministry, the number of riders for taxis and hired vehicles was about 1.373 billion in fiscal 2017, roughly half the total 20 years ago. Taxis are often used in rural areas with few regular bus routes and other means of transportation.
“More than half of taxis in operation don’t have customers. It’s important to boost the industry’s productivity,” a ministry official in charge said. The ministry and industry hope the new services and more effective operations preserve taxis as a mode of transportation.
The ministry has previously conducted trials that produced results. In 2016, for example, it conducted a feasibility study in Tokyo on boosting demand for short-distance rides, which led to initial fares being lowered to ¥410 in January 2017.
Other new services require time to take root. A test was conducted in Tokyo from January to March in which customers headed in the same direction used an app to share taxis.
However, only 10 per cent of customers who wished to share a taxi were able to do so.