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One of the world’s worst and most polluted commutes just got a little bit more worse on pricing. Guessing Uber is saying: “We have a solution!”
Beijing will raise taxi fares for the first time since 2006 to boost driver incomes after customer complaints that it’s becoming increasingly difficult to hail a cab in China’s capital city.
Starting from June 10, the base fare will be increased 30 percent to 13 yuan ($2.12) for the first 3 kilometers (1.86 miles), the Beijing Municipal Commission of Development and Reform said in a statement posted on its website. Each additional kilometer will cost 2.3 yuan, up from 2 yuan currently, according to the statement.
Beijing, which has been voted as having the world’s worst commute, is raising taxi fares to entice cab drivers to brave the morning and evening rush hours, when demand by the city’s 20.7 million residents is highest and traffic jams are at their most severe.
“Beijing traffic jams are really bad, so we spend a lot of time on the road but our passenger turnover is much lower,” said Chen Baiwen, a 42-year-old taxi driver in Beijing. “I’ll sometimes meet up with friends somewhere or if it’s evening I’ll go home for dinner” during rush hour.
Even after the fare increase, it remains cheaper to hail a cab in China than many other countries. Costs start at the equivalent of $7 in Tokyo, $3.30 in London and $3 in Washington.
Beijing’s cab drivers earned an average 53,892 yuan in income last year, lower than the city average of 56,061 yuan, even though cabbies usually work longer hours at about 10 hours a day, according to the local government.
Beijing currently has 66,646 taxis in operation for about 700 million trips in a city that’s about half the size of Belgium, according to the local government. About 6.6 percent of residents use taxis as their primary mode of transportation, with 70 percent traveling less than 8 kilometers per trip.
Worsening traffic jams and below-average driver incomes have led to the proliferation of smartphone applications that allow commuters to book a taxi by offering to pay more than the metered fare. The China Daily newspaper reported that the city will ban such apps from this month.
Shanghai, where the practice has also become widespread, will ban taxi drivers from accepting such bookings, the official Xinhua News Agency reported, citing Sun Jianping, head of the municipal transport authority.
In the past seven years, Shanghai has raised taxi fares twice, while Guangzhou and Shenzhen had one increase, according to the Beijing government.
Tian Ying, with assistance from Christine Hah in Beijing. Editors: Chua Kong Ho, John Liu. To contact Bloomberg News staff for this story: Tian Ying in Beijing at firstname.lastname@example.org. To contact the editor responsible for this story: Young-Sam Cho at email@example.com.