Plan to Lift Beijing Taxi Prices Was No Rumor - But Now Suspended

Economic Observer Online
Apr 14, 2011
Translated by Tang Xiangyang
Original article: [Chinese]

On April 12, rumors that the Beijing government was planning to lift the price of the city's taxi fleet on May 10, spread online.

That day, the Beijing Development and Reform Commission came out and dismissed the reports as rumors and announced that the city had no immediate plans to raise taxi rates.

However, according to more than one industry insider, the plan to lift taxi fares was no rumor - it was true.

As one person working in the industry told the EO, "Some taxi companies had already received an oral notification and had begun to prepare for the price adjustment, now you tell me were they really planning to raise prices?"

According to the original reports that circulated on Tuesday, the flag-fall price was set be lifted to 15 yuan from the current 10 yuan and the rate per kilometer was to be lifted to 3.1 yuan per kilometer, from the current rate of 2 yuan per kilometer for trips over 3km.

"It had been settled before. But now it's not certain whether it will be suspended," another industry player told EO reporter. He was also puzzled by the Beijing Development and Reform Commission's denial of any plans to raise prices.

On April 7, China raised fuel price for the second time this year. In Beijing, this pushed up the maximum retail price of 93-octane and 97-octane gasoline to 7.85 yuan per liter and 8.36 yuan per liter respectively.

In addition the "fuel surcharge" required when gasoline prices exceed a certain level, was raised from 1 to 2 yuan last weekend.

Perhaps a subtle altering in the wording that emerged from the reports on yesterdays executive meeting of the State Council offers some clues as to why a halt was called to plans to raise the price of the capital's taxis.

In the reports that emerged in the wake of the State Council's meeting, the analysis of the country's economic performance over the first quarter of this year differed in one important respect from the regular wording that is used on these occasions.

So while the members of the State Council who attended the meeting affirmed yet again that "so far this year the domestic economy is stable, and the national economy is doing well," but they did not follow this up with their regular line that "the general pricing level is basically stable" as they had done in previous years.

This article was edited by Paul Pennay

Links and Sources
Economic Observer Online: 北京出租车调价原非传闻 方案或被临时叫停 (Chinese)
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