Though customers aren’t expected to tip here, Japanese taxis are among the most expensive in the world, and next year rides will probably cost even more since the transportation ministry is considering removing the cap on fares and allowing a 2.86 percent rise to help taxi companies adjust to the consumption tax increase. That would boost the base taxi fare to ¥730 in Tokyo.
Before you start complaining think about the drivers. In 1995 the average salary of a Japanese cabbie was ¥4.03 million. In 2005 it was ¥3 million. And since the recession started in 2008 salaries have hovered between ¥2 and ¥3 million. There are various reasons for this loss of income, the main one being deregulation.
In 2002, the administration of privatizing Prime Minister Junichiro Koizumi allowed taxi companies to increase their vehicle pools. Between 2001 and 2007, the number of taxis nationwide increased by 15,000, driving up competition and driving down the amount of revenue per cab. In 2009, the government re-regulated the industry in an attempt to cut the number of cabs in 156 cities where it was deemed there were too many. Since then salaries haven’t gone down but they haven’t gone up either. Now taxi drivers and taxi companies are afraid because one of the pillars of “Abenomics” is, again, deregulation.
Though cabbie salaries compare to those of entry level jobs, most of the drivers are not entry-level workers. The average age is 56.8, and many have families to support. Moreover, the average number of years worked is 9.3, which implies that many cabbies started driving later in life, after they worked somewhere else and lost their jobs. There are very few taxi drivers in their 30s, even less in their 20s. Some older cabbies drive to supplement their social security.
In the July 4 issue of the Asahi Shimbun there was a profile of one male cabbie, 44, who has been driving since 2009, when he was laid off by a small company. The taxi company he works for has a sales quota. Each driver has to bring in ¥480,000 in fares a month. If the driver makes more than that, he gets to keep 53 percent as his commission. If he makes less, he only keeps 40 percent. The driver says he needs ¥250,000 a month to survive so he figures he needs to bring in ¥40,000 per shift, and it’s difficult. Apparently, some drivers supplement their revenues with their own money if they don’t earn their quota because they think it’s worth it in the long run.
Another taxi driver interviewed by the Asahi is 60 and has been a driver in Tokyo all his life. He supports a wife and grown son on ¥4 million a year and used to make ¥6 million. His normal work day is from 8 in the morning until 4 the next morning. The competition in Tokyo is so fierce that it’s sometimes impossible to find a place to wait for fares since so many other cabs are waiting. He tells the newspaper that some companies reduce their fares to be more competitive, which is illegal. Another common employer practice that may not be illegal but certainly seems unfair is subtracting the 4.8 percent handling fee from a cabby’s salary whenever a customer uses a credit card.
According to the Japan Federation of Hire-Taxi Associations, as of March 2010 there were 371,000 taxi drivers in Japan working for companies and 46,000 private taxi drivers. Of the former, 7,700 were women. The average number of hours for a cabbie is 193 a month. The average for all jobs is 183 a month. Revenues in 2010 nationwide amounted to ¥1.78 trillion. According to the labor ministry the average annual salary for a driver in 2011 was ¥2.9 million. The average for all industries is ¥5.26 million.