Cash users to take brunt of fare hikes

Kyodo

Rail and bus operators will raise fares for cash and smart-card users to reflect the 3-point consumption tax hike set for April 1, but they are split over how much to raise the fares.

The government will allow the operators to raise fares in increments of ¥1 for users of smart cards, but this is not feasible for cash charges. For those who pay in cash, fares will be raised in ¥10 increments. Land, Infrastructure, Transport and Tourism Minister Akihiro Ota said Tuesday that a “double fare” structure should be approved to correctly reflect the tax hike.

The decision means that after the sales tax is raised to 8 percent from the current 5 percent, smart-card users may be charged ¥154 for fares currently set at ¥150, while passengers paying in cash may be charged ¥160.

While railways in the Tokyo area, including East Japan Railway Co., will introduce the new fare structure, their counterparts in the Kinki region around Osaka have shown no interest.

JR East will also consider introducing it in areas surrounding Sendai and Niigata.

In past tax hikes, fares rose by ¥10 increments. The introduction of integrated circuit cards, or smart cards, that can store data has enabled firms to pass on the tax hike more accurately.

“We intend to increase the fare in ¥1 increments, in accordance with the transport ministry’s policy,” the managing director of JR East, Toshiro Ichinose, said Tuesday.

With the utilization rate of smart cards at around 80 percent in the Tokyo area, according to the transport ministry, railways in the Kanto region say they are ready to adopt a fare structure with ¥1 increments. By the end of September, JR East had issued 44.42 million Suica cards, with 23.64 million Pasmo cards issued mainly for use on non-JR railway lines and bus routes in Tokyo and surrounding areas.

“Raising fares in increments of ¥1 is a reasonable way to cover the amount increased along with the sales tax,” said Tokyu Corp., which accepts Pasmo cards.

However, the Tokyo Metropolitan Government’s bureau of transportation said the fares set at ticket machines should remain unchanged.

“Considering the expenses we will need to incur to modify ticket machines to use ¥1 coins, this idea is unrealistic,” the transportation bureau said.

Meanwhile, railways in the Kinki region, where smart card use is less than 40 percent, are more reluctant to change fares. The number of issued smart cards, such as the ICOCA card, used for railway services run by West Japan Railway Co., and the PiTaPa card, used on train systems run by private companies, totals 10.98 million.

Keihan Electric Railway Co., an operator in Osaka, Kyoto and Shiga prefectures, said: “the company won’t be able to introduce the new fares at ¥1 increments with a low smart card utilization rate.”