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October 10, 2009

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City taxi-fare increases mirror fuel

TAXI passengers in Shanghai will pay about 10 percent more from tomorrow as the city raises fares for the first time in three years to offset higher fuel prices and environmental protection costs.

The changes include raising minimum fares by 1 yuan (14.6 US cents) to 12 yuan and increasing the per-kilometer charge by 0.3 yuan to 2.4 yuan after the first 3km, according to the Shanghai Development and Reform Commission.

Passengers are likely to be charged at the old rates until about the end of the month as it will take time for taxi firms to make adjustments on the meters for all the 40,000-plus city cabs.

The new prices will be in place for at least a year according to a mechanism that links taxi fares to fuel prices introduced in the city in May 2006, when Shanghai last adjusted cab fares.

The fare lift comes after local gasoline prices have risen more than 30 percent since 2006.

The commission said a subsidy to taxi drivers that had been in place for more than two years would be terminated with the fare increases.

"That subsidy is not conducive to long-term development and will increase the fiscal burden," said Wu Jianrong, vice director of the commission.

The city government and taxi firms have been subsidizing each car with nearly 820 yuan a month to offset soaring fuel prices. The allowance is usually shared by two cabbies driving the same taxi.

Wu Chunpan, a driver with the leading Dazhong Taxi firm, said the extra revenue from the fare increase per month would be roughly the same as the subsidy.

Wu hopes the government will provide subsidies when necessary. "Otherwise we suffer losses when gas prices soar," he said.

Li Zhongjia, a cabbie with a smaller firm, is pessimistic. "I fear more people will take subways and buses," Li said.

Taxi fares average 23 yuan for each trip in Shanghai, according to estimates by city transport authorities. Based on that, the new prices will result in extra spending for each passenger of 2.32 yuan, or about 10 percent.

Long-haul passengers will be more affected.

For example, people will have to pay 12.4 percent more for a 30km ride under the new price structure, but only 9.1 percent more for a trip of less than 3km.

Some city commuters complained yesterday upon hearing the fare-rise news.

Stella Xu, a young office worker, said she feared sharing a taxi with others to work would no longer be financially viable.

Lu Yuchen, a reporter, agreed. "I can't afford the fare increase, which reinforces my preference for the subway," Lu said.

Others expressed concerns that higher fares could provide more business for illegal cabbies.

The 30 percent surcharge on night fares (11pm-5am) will still apply. That would mean a start-up fare of 16 yuan, compared with 14 yuan now, the commission said.

Start-up fares for regional suburban taxies will also rise by 1 yuan to 10 yuan, with the changes in the following per-kilometer fees in line with downtown increases.


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