In a bid to boost competition in the city bus and taxi industries, the Cabinet approved a bill Tuesday to ease regulations on operators starting new businesses.
The bill also contains an emergency measure that allows the Transport Ministry to regulate new entries and the number of taxicabs if it determines that there are too many in service.
The government submitted the bill to the Diet later in the day, aiming to enforce the measure by the end of March 2002.
The Transport Ministry originally planned to fully deregulate taxi and city bus operations by early 2002, but pressure from industry groups and lawmakers prompted the government to maintain some regulations.
The bill, which would revise the Road Transport Law, calls for abolishing the system under which the government regulates the number of city bus or taxi operators in accordance with passenger demand.
Under the proposed new system, licenses will be granted to any operator that meets required safety conditions.
City bus operators can set fares within limits approved by the Transport Ministry, according to the bill.
Before closing routes or businesses, city bus operators must give six months' notice to relevant authorities to help secure alternative means of public transport, it says.
The emergency measure allowing the ministry to regulate entry into the taxi market is necessary because excessive supply of taxis could cause "abusive competition" that might lead to a decline in the safety of cab driving, ministry officials said.
Currently, there are 53,000 taxi operators nationwide.
The ministry will also continue to regulate taxi fares on the grounds that varying fare systems could confuse passengers, according to the bill.