Shanghai's taxi riders may soon be feeling the pinch of higher fares for the first time in seven years.

At a public hearing yesterday on the effects of rising gasoline prices on the city's taxi fleet, it became clear that some form of fuel-related fare adjustment is on the horizon to take the burden off cabbies suffering from an earnings squeeze.

Taxi drivers may also get some relief in the form of lower payments for vehicle use.

Both proposals were floated at yesterday's session, sponsored by the Shanghai Price Bureau. And the 50 public citizens, cabbies and taxi company officials who showed up seemed to generally support both ideas.

The biggest uncertainty is the size and timing of the adjustments. There were no predications yesterday on when a decision would be made.

For cab drivers, it can't come anytime too soon.

The price of gasoline and diesel fuel rose more than 5 percent last month alone on the back of major increases in the cost of international crude oil.

Cabbies say they're making less money than they did before, despite increased fuel subsidies from the government and their companies. Some say they'll get out of the business if the situation doesn't improve soon.

Much of the discussion at yesterday's three-hour session centered around a fuel-price adjustment plan developed by the Shanghai Urban Transport Administration on behalf of the city's nearly 90,000 cab drivers, a group responsible for carrying one-quarter of the daily public transport volume.

"The plan would create a long-term mechanism that would not bring increased income to the taxi companies but ensure only that taxi drivers' income is not affected by fuel price rises," said the administration's vice director, Ma Yong.

Up and down

The fuel-related fare adjustment would work both ways as gasoline costs fluctuated over time.

Some of the meeting participants also insisted that taxi companies should improve their business efficiency, with smaller cars and better dispatching, to make fare increases a last resort.

The aim of all the plans is to maintain cabbies' monthly incomes at a minimum 3,000 yuan (US$370).

Fuel costs account for 34.6 percent of a taxi's operational costs, up 8.7 percentage points from 1998. Whenever the gas price rises 0.1 yuan a liter, each taxi driver pays 130 yuan more a month, according to the administration.

A Jinjiang Taxi Co driver surnamed Zhao told the meeting that cab companies should reduce the amount they charge drivers to use a vehicle and allow the fee to float with gas prices.

"It's unreasonable for them to just sit there and take the profit (from us) without any risk," he said, also raising the worry that a fare increase might drive away customers.

The major taxi companies charge cabbies flat fees of more than 10,000 yuan a month for the use of a vehicle, which is usually shared by two drivers in shifts.

Officials from the Shanghai Urban Transport Bureau said they may reduce the vehicle fee to around 9,500 yuan a month, depending on the type of car.

Wang Xuefang, a Dazhong Taxi Co driver, complained that the problem is far from a new one. He said cabbies' incomes have been decreasing since 1998 as a result of inflation and rising fuel prices.

(Shanghai Daily April 18, 2006)