A transport ministry advisory panel proposed Thursday that new taxi entrants and vehicle increases by existing operators on Okinawa's main island be restricted for a year beginning Sept. 1.
The proposal was spelled out in the Transport Council report, which was submitted to Chikage Ogi, the minister of land, infrastructure and transport.
In light of the report, Ogi will designate Okinawa Island an "emergency adjustment area" to curtail the glut of taxis, ministry officials said.
It will be the first such designation since a law was revised in February to liberalize new entrants into the taxi business.
On July 23, the ministry asked the council to discuss and come up with recommendations to solve the problem of worsening services and declining income by taxi drivers due to intense competition on the island.
The request came after the island became subject to the revised law's criteria, which include the number of rider complaints and the taxi occupancy rate.
In fiscal 2001, the taxi occupancy rate on the island stood at 31.5 percent, 12.4 percentage points lower than the national average.
The ministry has already designated 140 of the 733 taxi business areas as requiring special watch on oversupply. But Okinawa Island is expected to be the only area selected for actual emergency restrictions in the current fiscal year.