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May 28, 2011

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Shanghai's taxi fares to rise from mid-July

SHANGHAI plans to raise taxi fares and introduce a fuel surcharge to help the industry cope with rising petrol prices.

The Shanghai Development and Reform Commission, the local pricing authority, yesterday unveiled two options pending a public hearing on June 13.

In one proposal, the flag-down fare will rise to 13 yuan (US$2) from 12 yuan while charges after the first 3 kilometers will remain at 2.4 yuan/km.

In the other, the flag-down rate will remain unchanged but the per/km fee after the first 3 kilometers will be 2.7 yuan.

The average taxi trip in Shanghai is 6.3km, according to official data.

The additional revenue in each proposal will go to the cabbies, who have seen below-average income growth in Shanghai over the past years, the commission said.

The city plans to apply a separate fuel surcharge for the taxi industry, a measure already adopted in other cities, including Beijing.

The surcharge will be 2 yuan per trip under the current price of 7.79 yuan per liter for 93-octane gasoline, the fuel widely used by taxis in Shanghai. It could rise to 3 yuan per trip if fuel prices rise above 8.01 yuan but any surcharge rate would be in place for at least one year.

There were 48,872 taxis in Shanghai at the end of 2010, including 5,009 operating in suburbs which charge lower fees, the commission said.

The industry employs about 100,000 drivers.

They have to rely on government subsidies to be profitable in the face of rising fuel prices.

The last time Shanghai raised taxi rates was in October 2009.

The fuel surcharge will not go to the drivers but will be used to offset government subsidies.

Cao Yongzhen, a taxi driver who has been in the business for 16 years, prefers the second proposal.

With the first plan, one driver can get a maximum of 40 yuan extra for 40 trips a day, while a driver has the chance of earning more under the second option if the taxi makes many long trips, Cao said.

Cabbie Wan Xiaokou said: "Passengers won't care too much if they step into my cab and see the starting price does not rise." He said many passengers just took short trips like from Metro stations to their destination.

Price rises are expected to affect taxi hiring initially but an official with the pricing authority said business would return to normal after a month because taxi passengers were not as price sensitive as other commuters.

The new prices are expected to be effective from mid-July. The 30 percent surcharge on night fares (11pm-5am) stays.


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