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Changes coming soon to Japan's taxi industry

36 Comments

Since the "Lehman Shock" of 2008, operators of taxi fleets have been forced to contend with labor shortages, price increases and, in some areas, an oversupply of vehicles. A decade and a half after deregulatory measures were put in place in 2002, they've been campaigning for the government to reimpose controls on the market.

But Shukan Jitsuwa (June 9) reports the Abe government now appears increasingly favorably disposed toward adoption of ride sharing systems, along the lines of Uber, that would enable drivers to transport their passengers in privately owned vehicles.

Anticipating changes in the marketplace, Nihon Kotsu Co Ltd, a major taxi firm, in April filed an application to the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) for permission to reduce the initial charge for passengers in the 23 wards of Tokyo and two bordering western suburbs, the cities of Musashino and Mitaka, from the current 730 yen for the first two kilometers to 410 yen for the first kilometer.

While passengers on short rides will save money, Nihon Kotsu's new rate structure -- which will go into effect from next April if approved by the ministry -- will actually represent a fare increase of several percent.

"I'm against it," said one Tokyo cabby. "While we might expect more business from families with small children and seniors, the number of long fares, especially on the weekends following payday, are likely to decline. With fewer passengers taking long rides, there's a likelihood that turnover will drop."

"While the number of foreigners has been increasing, communications can be a problem," the driver continues. "Our company began arranging for English studies, but nearly all the drivers are getting along in age, and frankly, many of them just aren't up to learning a foreign language."

As opposed to an average age of around 47 for bus and truck drivers, the average for taxi drivers is 58, and it's clear that few younger people are taking up the profession. According to the Ministry of Health, Labor and Welfare statistics for 2014, only 43% of taxi drivers were age 39 or lower.

"Even when we do recruiting, there are no young applicants, and the ones we do hire in rare cases quit their jobs soon," a source at a taxi firm is quoted as saying.

Despite long working hours, driver wages tend to be low -- under 4 million yen per year.

Business has also been hurt by more companies abandoning the practice of providing employees with taxi tickets, which enable staff members at ad agencies or in the media (for example) who work late, or who entertain clients, to travel by car.

"In the entertainment areas like Shinjuku or Ginza, most of the customers who still use tickets keep their trips short, with fares under 5,000 yen," one driver tells Shukan Jitsuwa. "I seldom get any long-distance fares exceeding 10,000 yen any more."

The trend toward ride sharing and use of services such as Uber is ongoing worldwide. A business reporter points out that earlier this month, U.S. company Apple Computer invested $1 billion in Didi Chuxing, a company that currently holds over 80% of the market for ride-hailing in China.

Concerned over the incursions on their livelihood, over 2,500 demonstrators, representing eight labor unions related to the taxi industry, marched in a demonstration in Hibiya, Chiyoda Ward, last March 8. The speakers invoked slogans like, "Japan's taxis, which provide safety and peace of mind, won't tolerate this kind of intimidation."

Entrepreneur and news commentator Takafumi Horie, however, was critical of drivers who are unfamiliar with the roads and can't figure out how to use car navigation systems. The new sharing system, he said, promises better efficiency all around.

But those in favor of traditional taxis warned of possible risks, such as dangers to female passengers, "who might find themselves abducted by perverts," as one person put it. They also raised the examples of riding in vehicles whose operators were not subject to the same type of safety requirements as are licensed professionals.

Shukan Jitsuwa accepts that wider adoption of information technology might very well force small and medium-size taxi firms out of the market. But in any case, is it not a good thing, it asks rhetorically, to let users have a choice?

© Japan Today

©2021 GPlusMedia Inc.

36 Comments
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but nearly all the drivers are getting along in age, and frankly, many of them just aren’t up to learning a foreign language.”

And as should be noted as well, they aren't up to driving very well in many cases and should have no business being on a road let alone carry customers.

12 ( +16 / -4 )

The speakers invoked slogans like, “Japan’s taxis, which provide safety and peace of mind, won’t tolerate this kind of intimidation.”

Ah, Japan. I'm no shill for Uber, but it tells you something about the society when the ability to compete in business is protested as "intimidation".

13 ( +17 / -4 )

It seems the industry has multiple problems that need solving. I hope they are able to do so.

2 ( +3 / -1 )

Even competition between existing taxi companies might reduce prices. Why does it have to be a government-mediated cartel? But, I guess, even if government is not involved, the natural inclination to create a cartel will be strong amongst the companies. Given this natural inclination, then choice? No, not in Japan. You tend to get what you are given.

6 ( +7 / -1 )

Isn't this how capitalism is supposed to work though? Survival of the fittest and whatnot.

Where I live, if they were smart, they would cut the number of taxis and drivers by like 30-40%. There are dozens upon dozens of taxi drivers who just sit around idle. Simply walking downtown (about 20 minutes from my house) it is not uncommon for 2-3 taxis to pull up next to me, door flying wide open. It's dangerous and slows up traffic with them "parking" in the middle of busy streets.

Less Taxis = Less salary out = less customers have to pay (well ideally) = less mindless crowding of roads.

2 ( +3 / -1 )

It seems the industry has multiple problems that need solving. I hope they are able to do so.

The government IS to blame for the problems with taxis here. There used to be a time when a driver could make a decent living driving a taxi but when the bubble burst and all those middle-aged folks became unemployed the government stepped in and "created" a bunch of new jobs by allowing more taxis on the road, and women started driving too.

Down here the number of taxis exploded in numbers and now the average driver here makes less than half of what they used to make, driving full-time during the daytime hours. Nighttime is down by something like 2/3's.

Same thing in a number of other industries as well, service related one's that is.

4 ( +5 / -1 )

but nearly all the drivers are getting along in age, and frankly, many of them just aren’t up to learning a foreign language.”

This isn't just the taxi industry. This is ALL of Japan.

Even when we do recruiting, there are no young applicants, and the ones we do hire in rare cases quit their jobs soon,”

Gee, I wonder why...

Despite long working hours, driver wages tend to be low

Ahhh...That's why.

4 ( +7 / -3 )

I've seen taxi driver jobs advertised that appeared to be 16 hour shifts. That should be illegal.

4 ( +6 / -2 )

You drive a taxi in Tokyo where a fair number of your passengers may be foreigners....and you are "not up to" learning a few useful phrases in English?? Better join the queue at Hello Work if that's your attitude to your job.

3 ( +7 / -4 )

But those in favor of traditional taxis warned of possible risks, such as dangers to female passengers, “who might find themselves abducted by perverts,”

Since taxi drivers can't be perverts? I think we all know that no matter the occupation, there are always perverts and violent individuals.

5 ( +6 / -1 )

You drive a taxi in Tokyo where a fair number of your passengers may be foreigners....and you are "not up to" learning a few useful phrases in English??

I was reminded once when I saw off a friend who was staying the Imperial Hotel in Hibiya some years ago, in the days when Haneda was Tokyo's only airport. We had bid each other farewell and as I began walking away from the taxi he'd just boarded I heard him shout my name. I came hustling back and my red faced friend (he had a rather short temper) angrily demanded, "Tell this stupid #$%@&> I want to go to the airport*!" You would think that taxis that queue outside an international hotel might anticipate such a scenario. I should add that the hotel's doormen usually assist at such times, but the hotel was hosting some sort of big event and the hotel's driveway was a bit congested.

4 ( +7 / -2 )

This is happening all over the world. Taxi services have largely been protected by their respective authorities for decades, essentially charging whatever they like. It should not cost an individual in excess of ¥15,000 to go less than an hour home from Tokyo. Besides, there are just too many taxis that sit idle all day here. Thousands upon thousands of them.

Times are a changin', old timers!

6 ( +8 / -2 )

Even at a reduced rate of 410 for the first km, flag fall in a Japanese cab is at least twice what it is in other major metropolitan areas around the world, and there are scores of them waiting outside every major station and entertainment district. Why don't prices fall to reflect the level of competition? "Administrative Guidance" by the government to discourage competition. Another instance of micromanagement by bureaucrats where none is required.

2 ( +3 / -1 )

“Japan’s taxis, which provide safety and peace of mind, won’t tolerate this kind of intimidation.”

So, they took to the streets to shout this with loudspeakers, eh? Gotta love it when they scream they won't be 'intimidated' by competition. Losers. If they can't compete, get out. The public will welcome the change.

5 ( +6 / -1 )

Since the “Lehman Shock” of 2008, operators of taxi fleets have been forced to contend with labor shortages, price i>>ncreases and, in some areas, an oversupply of vehicles.

Lehman Shock emptied Wall Streets, some banksters and investors's pocket, Abenomics is emptying Japanese taxi riders's pocket, don't make the amalgam please....

-1 ( +0 / -1 )

So I'm going to jump in here again and make a translation related remark, even though that is not the main point of the story. The ' “Lehman Shock” of 2008 ' at the start of this article is clearly a translation of リーマン・ショック, but since リーマン・ショック in Japanese refers not specifically to the bankruptcy of the Lehman Brothers but to the global financial crisis of 2008 in general, "global financial crisis of 2008" is the translation you are looking for.

Directly, the problems faced by taxis in Tokyo are a pretty long way down the causal chain from the Lehman Brothers specifically. As a general guide, I think communication through translation works best when processing is done at the deepest possible level. In other words a translation should be guided by what a phrase really means, how it is used, and what it refers to, rather than superficially lexical similarities which may or may not actually refer to the same thing.

Interestingly, the Japanese wikipedia page on リーマン・ショック links to the English page on the "Bankruptcy of the Lehman Brothers", even though the first paragraph of the リーマン・ショック page correctly explains that the page is actually about the financial crisis in general, so the confusion is quite widespread.

In any case, if ever I receive a translation with the wordsリーマン・ショッ which is not specifically about the Brothers Lehman, I replace it with "global financial crisis" and it always fits.

2 ( +3 / -1 )

Good point jpn_guy. And entirely accurate.

1 ( +4 / -3 )

jpn_guy, I see your point, but there are other points of view that also have to be considered. For instance when referring to Japan's reaction to the middle east oil embargo following the 1973 mideast war, at some point afterwards it became common to refer to the term "oil shock." (It's even in the Oxford English Dictionary.) Then there's the "Nixon shock" a couple of years earlier, in which Tricky Dick took unilateral measures to force the yen's value upward. Both these terms have pretty much entered the language and don't require any additional explanations; the subject is assumed to be understood by the reader. So "Lehman shock," when used as it is here in reference to a collective series of events, ought to be familiar enough to readers of a feature story on the taxi industry when the events themselves are not the main subject of the article. When I saw those words, I understood exactly what the translator was referring to, and by your own admission so did you. And most likely so did most of the other readers. You rightly pointed out that this article's translation could have been better -- I agree -- but I'll give the translator a pass on Lehman shock in this context.

3 ( +4 / -1 )

Too little demand at the currents fares...more demand if the fares were lower like in South Korea. Also if the fares were lower, drivers may actually make more money since taxi drivers are sitting/driving around without passengers most of the time.

0 ( +1 / -1 )

at some point afterwards it became common to refer to the term "oil shock."

Which I've always associated with a shortage of toilet paper.

1 ( +2 / -1 )

An excellent account and business example when greed ends up "pricing ones self out of a market"...best to the greedy taxi companies who have for years manipulated a service at the cost of the people and its own customers, failed to meet the needs of drivers that now that too is difficult a position to fill.

0 ( +1 / -1 )

Sharing car system sounds great. I haven't knew it. If you want to use the internet site of sharing car systems, first ,confirming users safety, you have to file your identification papers or some others on most of that kind of sites. Everybody should not take a long distance trip very often so I don't think that it is not worth spending much time to follow this troublesome procedure.

0 ( +1 / -1 )

Why is Japan afraid of competitors in this market? Are there a bunch of labor union lobbyists? How do these taxi companies even afford them? How do they make any money? Competition is the epitome of a free market. It provides many potential, quality and low-price choices for the consumer.

1 ( +2 / -1 )

I think you need some basic standards for taxis about insurance and registration, but you do not need cartels.

We have three kids and our eldest is approaching 12, so it can be hard to get a regular cab to take all five of us. The taxi industry could have innovated and brought in more minivans, some of which get similar fuel economy to the Crowns etc. that they use, but they couldn't be bothered. It's easier to just say "muzukashii" or "dekinai" and moan about the lack of salarymen paying 15,000 yen a ride on Friday night like the good ol' days. In London, a taxi with four will often be cheaper than public transport. Stick enough in a Tokyo taxi and they could be too. Such income would keep things ticking over for them, like lower value business at lunchtime does for restaurants.

5 ( +6 / -1 )

Even at a reduced rate of 410 for the first km, flag fall in a Japanese cab is at least twice what it is in other major metropolitan areas around the world, and there are scores of them waiting outside every major station and entertainment distric

Umm, Toronto is C$4.00 Canadian just to get in the cab, so Tokyo is certainly not double that price.

-2 ( +0 / -2 )

Umm, Toronto is C$4.00 Canadian just to get in the cab, so Tokyo is certainly not double that price.

I don't believe the 410 yen taxis exist yet. It's over 700 yen to get in a taxi in Tokyo right now. 410 is the reduced rate if/when they implement it, which will be April next year at the earliest.

0 ( +2 / -2 )

Why is Japan afraid of competitors in this market?

because it is the foundation here: No external competition because it cannot allow monopolies and price fixing.

1 ( +2 / -1 )

I seriously think they have little understanding of the relationship of pricing and supply and demand, and have never looked to find what would lead to the optimal revenue. They probably have been "we can keep raising the prices and people will surely keep riding while saying 'shouganai'" and losing money in the process. And the fact that they easily band together and make demands to government, make changes as a collective group, etc. shows that they are essentially a government-backed cartel.

More competition, please.

0 ( +1 / -1 )

many of them just aren’t up to learning a foreign language.” well retire and get somebody in that's is, If a competitor will offer better customer service at a lower price why shouldn't they be allowed to compete against the taxi industry. Taxi industries should have competition like any other industry it provides a better product for the consumer if your product isnt value for money people wont use it , simple.

0 ( +1 / -1 )

Just keep the "traditional" cars (from 1980). London's new Taxis are barely acceptable, but I think all the ones in New York these days are Ford Transits, not big Checker jukeboxes. That's just sickening.

-3 ( +1 / -4 )

It really is amazing how bad some of the taxi driver are.

I had to take taxi to destination in small town Japan. Had the address in Japanese, the phone number, and a web page open on my phone showing the exact place, name , address etc.

Still took the guy 15 minutes of studying old paper maps and several phone calls to dispatch before we started on our epic journey (about 3000 yen trip).

I mean, how hard is it with a GPS in your car? Punch in the phone number and go.

1 ( +1 / -0 )

It really is amazing how bad some of the taxi driver are. I had to take taxi to destination in small town Japan. Had the address in Japanese, the phone number, and a web page >open on my phone showing the exact place, name , address etc. Still took the guy 15 minutes of studying old paper maps and several phone calls to dispatch before we started on our >epic journey (about 3000 yen trip). I mean, how hard is it with a GPS in your car? Punch in the phone number and go.

I hear ya! Tried to tell this taxi driver how to get somewhere, he takes the long way around and I was like "what the crap, dude?? I didn't say to turn there!" And then he "generously" takes 20 yen off of something that was still about 100 yen more than it was supposed to be. I've taken that route enough times to know what the price is supposed to be, and this was the second time he took the long way around (that I told him not to take) and got extra money from me.

1 ( +1 / -0 )

I found japanese taxi drivers to be most reliable polite an helpful when i lived in japan in 2014/2015 sure they may be expensive but thats to be expected of any top city i have lives in Vancouver london and new york an i rate tokyo taxi drivers as the best out of them all an Why should japanese taxi drivers be required to learn english to keep there jobs, after all it's japan a japanese speaking country, if you plan on visting japan an taking a japanese taxi you should buy a japanese phrasebook an try to learn the basics to get around

2 ( +2 / -0 )

Changes mean Uber and Lyft drivers can wise up and be their own boss

0 ( +0 / -0 )

Let's face it, thousands of cabs driving around the city throughout the day and night cannot be efficient. It's very easy to hail a cab in Tokyo, but imagine how many are just driving empty so that this is possible. Something like Uber could reduce the number of cars on the road substantially.

0 ( +0 / -0 )

We really enjoyed the nice, white linen in the taxi when we visited Japan. So clean! Also, the trains seemed clean. A lot better than the US! Oh, and the hand-cleaning cloths at restaurants......I have longed for just one US restaurant to adopt the habit, but they just don't.

-2 ( +0 / -2 )

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