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Economy minister Hiroko Ota on Friday slammed the proposed fare hike by Tokyo taxi operators, saying the measure may not increase drivers’ wages as they claim, due to inefficiency in the industry.

“In raising public service costs, accountability to consumers should be the priority. We need to consider whether the taxi industry has truly made efforts” to promote efficiency, Ota said.

Tokyo taxi operators have demanded an average 18.7 percent increase in taxi fares starting this summer, citing higher fuel prices and the need to improve their working conditions.

A government panel on price stability discussed the proposed fare hikes Thursday in Tokyo. The members failed to reach consensus as many were concerned about increasing the burden on consumers and projected that demand for taxi services will decrease after a fare hike.

Specifically, taxi companies have requested that the Land, Infrastructure and Transport Ministry raise the drop fare from the current range of 640 yen and 660 yen to a range of 750 yen and 810 yen. Taxi fares in Tokyo were last raised in 1995.

Due to government deregulation efforts, the number of taxis in Tokyo has expanded to 34,702 in fiscal 2005 from 30,722 in fiscal 1996.

According to a taxi industry association, the average annual income of drivers in the metropolitan area had dropped to 4.06 million yen in 2005 from 5.28 million yen in 1995, reflecting excess supply and Japan’s economic slump.

Ota said at the news conference that the taxi industry and other parties must fully analyze the consequences of deregulation.

“Usually, deregulation will streamline suppliers and prompt businesses to cater to various types of demands to the benefit of consumers,” she said. “But it is unclear how much effort the taxi industry has made to that end.

Despite the increase in the number of Tokyo tax drivers in recent years, their quality has apparently deteriorated. Many customers have had embarrassing experiences in taxis — drivers can’t locate destinations and figure out the best routes. For customers, this can often result in making pricey detours.

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