Deregulation has barely touched the Japanese taxi industry, and as its notoriously high fares and declining riders continue, firms are resorting to perks to woo additional customers.
According to the Transport Ministry, the average number of passengers in 1998 averaged 6.9 million people per day — down 24 percent compared to the peak numbers posted in 1989.
To remedy this, Keio Automobile, the Tokyo-based operator of Keio taxis, introduced a frequent passenger program last month.
Under the new service, Keio will offer gifts to customers who spend 100,000 yen or more riding its taxis by the end of next September.
Gifts worth 2,000 yen to 20,000 yen will be offered depending on the amount of money passengers spend on Keio taxis by credit card, cash and taxi tickets combined, according to the company. The nature of the gifts was not spelled out.
“With this new service, we are trying to increase regular passengers. Maybe busy people don’t have time to select a taxi company, but this will be beneficial for those who call a cab beforehand,” a spokesman for the company said.
Keio, which already has some 2,000 customers registered for the new service, hopes to raise that number to 10,000 by the end of March.
In a similar attempt, another Tokyo-based taxi operator, Green Cab, is waiving its fee for requested pick-ups. In addition, its drivers are offering free umbrellas to passengers caught in sudden downpours.
But it remains uncertain whether the new perks will have a significant impact on the bottom line.
Since the government began to ease its iron regulatory grip on the industry in 1993, the industry has witnessed a series of customer-drawing campaigns — some short-lived and fetching little attention — designed to help the carriers vie for a bigger share of the shrinking rider pie.
For instance, under current regulations, taxi companies can offer discount coupons of up to 5 percent, but such coupons are rarely heard of today.
Four years ago, many taxi companies rushed to introduce the coupons and succeeded in increasing customers. But they soon stopped the service, realizing that the accompanying paperwork was costing them more than they were earning from the scheme, industry sources said.
More recently, some Tokyo-based taxi companies introduced a reduced fare of 340 yen for the first kilometer, compared with the usual 600 yen to 660 yen fare for the first 2 km, to attract short-distance passengers. But such riders are also declining, and little was achieved.
Keio’s frequent passenger service, the first of its kind in the industry, may inspire competition, but only if it proves a success to the point where other firms feel the impact.
And it may all depend on the number of taxes available, especially in central Tokyo, an area where competition is especially fierce.
Keio, which operates 1,100 taxes in Tokyo and Kanagawa Prefecture, has only 400 in Tokyo’s 23 wards out of the 46,000 cabs plying the area.
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