LegCo Panel on Transport
URBAN & NT TAXI FARE INCREASE APPLICATIONS
Introduction
The Transport Advisory Committee has recommended an average increase of 6.3% in fares for urban taxis and 7.4% for New Territories (NT) taxis. It is proposed that the new fares come into effect in late April/early May 1997.
Background
2. Urban and NT taxi fares were last increased on 4 February 1996 by 8.5%. Since August 1996, five groups of urban taxi associations and one group of NT taxi associations have applied for fare increases to cover increase in operating costs.
Policy
3. Taxi fare increase applications are considered in accordance with the following guiding principles -
- the need to ensure the financial viability of taxi operations, taking into consideration changes in revenue and operating costs;
- the need to maintain an acceptable level of taxi service in terms of taxi availability, passenger waiting time and feedback from passengers;
- the need to maintain a reasonable differential between taxi fares and those of other public transport modes; and
- the likely public acceptability of the proposed fares.
Fare Options for Urban Taxis
4. A number of fare options with flagfall charges ranging from $14.50 to $15.50 have been examined. Having regard to the guiding principles outlined in paragraph 3, the following four fare options are set out for further consideration -
|
Options
|
Flagfall for
first 2 km
|
Each
Subsequent
0.2 km
|
Waiting
time per
minute
|
Percentage
increase
|
Fare
Differential
|
|
|
|
|
|
|
|
Current
|
$14.00
|
$1.20
|
$1.20
|
-
|
5.26
|
|
A
|
$15.00
|
$1.20
|
$1.20 per 50 sec
|
5.6%
|
5.58
|
|
B
|
$14.50
|
$1.30
|
$1.30
|
6.3%
|
5.61
|
|
|
|
|
|
|
|
C
|
$15.00
|
$1.30
|
$1.30
|
7.8%
|
5.69
|
|
D
|
$15.50
|
$1.30
|
$1.30
|
9.4%
|
5.77 |
5. The four options are examined below -
- Option A : This is the option proposed by a group of operators, most of whom are drivers. The percentage increase (5.6%) would be much lower than the forecast inflation rate of 7.4% for the period 1 February 1996 to 1 May 1997. The proposed increase in waiting time charges by 20% would penalise passengers caught in traffic congestion. Furthermore, there would be technical problems in reflecting accurately the increase in waiting time charges in the conversion tables which are used before taxi meters are recalibrated.
- Option B : The average increase of 6.3% under this option is slightly below the forecast inflation rate, and we do not expect strong opposition from the public. Consequently, passenger resistance, if any, should be mild. The increase would bring the income of operators to a level closer to, although still below, their past income.
- Option C : This is the option proposed by three groups of operators, most of whom are owners. The average increase by 7.8% is slightly above the forecast inflation rate. It would bring the income of operators to a level close, but not equal, to their past income. This option is likely to be criticised by those operators who have proposed lower increases. Passenger resistance would be greater.
- Option D : This is the option proposed by a group of operators, mostly owner-drivers. The average increase by 9.4% is higher than the forecast inflation rate and is expected to be unacceptable to the public.
6. In the light of the above analysis, Option B would appear to be the best and is, therefore, recommended. With the proposed increase, the monthly net income of the three groups of taxi operators is shown below -
Average Monthly Net Income of the Urban Taxi Operators
|
Rentee-
drivers
|
Owner-
drivers
|
Rentor-
owners
|
|
Average net income in past 3 yrs
|
$12,741
|
$20,253
|
$8,057
|
|
Projected May 1997 income
(assuming no fare increase)
|
$11,342
|
$18,232
|
$7,409
|
|
Projected May 1997 income
(with 6.3% fare increase)
|
$12,406
|
$19,802
|
$7,902 |
Fare Options for NT Taxis
7. A number of fare options with flagfall charges ranging from $12.50 to $13.00 have been examined. Having regard to the above-mentioned guiding principles, the following four fare options are set out for further consideration -
|
Options
|
Flagfall for
first 2 km
|
Each
Subsequent
0.2 km
|
Waiting
time per
minute
|
Percentage
increase
|
Fare
Differential
|
|
|
|
|
|
|
|
Current
|
$11.80
|
$1.10
|
$1.10
|
-
|
3.70
|
|
A
|
$12.80
|
$1.10
|
$1.10
|
4.7%
|
3.87
|
|
B
|
$13.00
|
$1.10
|
$1.10
|
5.6%
|
3.90
|
|
C
|
$12.50
|
$1.20
|
$1.20
|
7.4%
|
3.96
|
|
|
|
|
|
|
|
D
|
$12.80
|
$1.20
|
$1.20
|
8.8%
|
4.02 |
8. The four options are analysed below -
- Option A : The average increase (4.7%) is well below the forecast inflation rate. The trade would consider the rate of increase too low and would not restore the financial position of the trade.
- Option B : This option creates a very front-loaded fare structure. Also, an average increase of 5.6% would not be acceptable to the taxi trade. Some members of the public may also object to the substantial increase in flagfall charges.
- Option C : The average increase (7.4%) is the same as the forecast inflation rate and is expected to be acceptable to the public. It would bring the income of operators to a level close to, although still below, their past income.
- Option D : This is the option proposed by the NT taxi associations. The average increase (8.8%) is higher than the forecast inflation rate and is unlikely to be acceptable to the public.
9. In the light of the above analysis, Option C is recommended. The monthly net income of the three groups of taxi operators under the recommended fares is shown below -
|
Rentee-
drivers
|
Owner-
drivers
|
Rentor-
owners
|
|
Average net income in past 3 yrs
|
$8,903
|
$11,773
|
$3,815
|
|
Projected May 1997 income
(assuming no fare increase)
|
$7,930
|
$10,217
|
$3,317
|
|
Projected May 1997 income
(with 7.4% fare increase)
|
$8,847
|
$11,530
|
$3,687 |
Surcharges
10. The taxi associations have proposed no change to the surcharges. It is recommended that the existing surcharges should remain unchanged for the time being.
Summary of Recommendations
11. The following revisions are recommended -
|
Urban Taxis
|
NT Taxis
|
|
Existing
fares
|
Recommended
fares
|
Existing
fares
|
Recommended
fares
|
|
|
|
|
|
|
Flagfall for first 2 km
|
$14.00
|
$14.50
|
$11.80
|
$12.50
|
|
|
|
|
|
|
Fare for every subsequent 0.2 km
|
$1.20
|
$1.30
|
$1.10
|
$1.20
|
|
|
|
|
|
|
Waiting time charge per minute
|
$1.20
|
$1.30
|
$1.10
|
$1.20
|
|
|
|
|
|
|
Telephone booking surcharge
|
$5.00
|
$5.00
|
$4.00
|
$4.00
|
|
|
|
|
|
|
Surcharge for every article of baggage, animal or bird
|
$5.00
|
$5.00
|
$4.00
|
$4.00 |
12. The recommendations will be put to the Executive Council for consideration.
Transport Branch
Government Secretariat
22 January 1997
Last Updated on {{PUBLISH AUTO[[DATE("d mmm, yyyy")]]}}
