Friday, April 12, 2013

Beijing Taxis Raise Fares to Increase Access

Beijing transportation authorities confirmed that the municipality will adjust its taxi fare pricing system as part of the measures taken to increase access to taxis, Beijing News reported.
A hearing inviting all stakeholders will be held before releasing the new price plan, and the price increases will mainly go to taxi drivers, the paper reported.
Taxi prices have remained unchanged for years in the capital, causing discontent among taxi drivers.
It has become increasingly difficult to get a taxi during rush hours in Beijing, as many drivers prefer to suspend their business due to high operating costs, such as rising gas prices.
By keeping fares artificially low drivers had little incentive to work during periods of high demand. This situation is only one anecdote, but it does highlight that in many cases raising prices of transportation--road, transit, taxi, etc.--improves service. Should fares, tolls and fees be high enough to ensure lots of service or low enough so that service is difficult to provide?
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