December 2, 2013
In the extraordinary session of the Diet, the bill to re-enhance regulation over the taxi industry (“bill to optimize and promote taxi industry”) was proposed by Diet members and passed into legislation.
It aims at reregulating the industry by taking the following measures, based on a recognition that an ‘excessive deregulation’ brought about increases in the number of taxi cabs, and consequently led to overwhelming workloads, wage decrease, and higher rates of accidents.
1)Strengthening of supply-demand adjustment (prohibition of entry and increase in designated area, compulsory reduction of number of cabs)
2)Strengthening of fare regulation (application of publicly-stipulated range of fares in designated area)
However, at the first hand, the understanding that an “excessive deregulation caused troubles’ is not an accurate view.
Rather, it should be taken as a ‘halfway deregulation caused troubles’.
The revision of the law in 2020 abolished the demand-supply adjustment, though, the restrictions remained with regard to the fare under the government authorization system, so there was little progression to elasticity of fares. It appears to have caused the supply-demand gap, as result of increasing supply combined with the sustained demand without decreasing price.
Such problems as worsening working environment of taxi drivers or higher rate of accidents are the ones which should be addressed through enhancement of safety regulations such as driving hours, technical training to drivers and safety check on vehicles.
On the other hand, reducing the number of taxi vehicles and to increase fares, as the legislation stipulates to that end, would cause no positive effect on improvement on health and salary of drivers and the safety itself of taxi services. It only brings profits to the taxi operators, among others, by exploiting labor opportunities for drivers and payments made by service users. After all, the strengthening of supply-demand adjustment and fare regulation is undeniably a policy protecting certain kinds of vested interests and harming interests of general consumers and labors; a regression to the classical style of regulation since back in the 1960s.
In light of this, we propose the following suggestions.
1.Reconsider the bill to optimize and promote taxi industry which was passed into legislation in the extraordinary session of the Diet as swiftly as possible.
2.Monitor cautiously that an implementation of the policy within the scope of the law will not be an excessive regulation (in particular, designation of the ‘designated area’ and ‘quasi-designated area’, scope of application of supply-demand of in the area, setting of range of fares, etc.), and also that the Diet monitors the implementation strictly.
In addition, we expect that in government panels, such as Industrial Competitiveness Council and Regulatory Reform and Regulatory Reform Council, will continue to conduct thorough verifications.
Hiroyuki KISHI, Professor, Keio Gijuku University
Takao KUSAKARI, Advisor, Nippon Yusei Kabushiki Kaisha
Shigeaki KOGA, former official of the Ministry of Economy, Trade and Industry
Yoshio SUZUKI, former chairman of Asahi Research Center Co. Ltd.
Wataru SUZUKI, Professor, Gakushuin University
Yoichi TAKAHASHI, Professor, Kaetsu University
Ushio CHUJO, Professor, Keio Gijuku University
Shuya NOMURA, Lawyer/Professor, Chuo University Law School
Hiroyuki HASHIMOTO, Professor, Keio Gijuku University
Eiji HARA, President, Public Policy Planning and Consulting, Co.
Robert A. FELDMAN, Chief Analyst on Japan and Managing Director, Morgan Stanley MUFG Ltd.
Hideo FUKUI, Professor, National Graduate Institute for Policy Studies
Naohiro YASHIRO, Visiting Professor, International Christian University
(as of December 5)