Tokyo Cab Fares May See First Hike in 15 Years as Oil Soars

(Bloomberg) -- Tokyo cabbies are seeking their first fare hike in 15 years as skyrocketing oil and gas prices bring inflation to the streets of one of the world's most densely populated cities.

Taxi operators in the city of 14 million have notified regulators that they want fares raised due to a surge in energy prices and increased costs incurred from the coronavirus pandemic, local broadcaster NHK reported without attribution on Thursday. Enough requests have poured in to trigger a mechanism that forces the transport ministry to consider them, the report said.

Price hikes are generally avoided at all costs by companies in the world's third-largest economy due to stagnant wage growth and decades of subdued prices. But Japan has been slowly but surely feeling the strain of global inflation, with prices of everything from necessities like food and utility bills rallying due to increase in demand and supply chain issues. Crude oil is at the highest since 2013 while global gas and coal are at records, pressuring the prices of fuel and electricity that power the city's vehicles.

Tokyo is famous for its fleet of immaculately clean taxis steered by glove-wearing drivers, and cabs are ubiquitous on city streets -- except in rainy times. Many taxi operators now say they are also losing money due to a drop in customers as the pandemic kept people at home, while implementing virus protection measures increased costs, such as installing cashless payments, NHK reported.

Taxi fares in the city start at 420 yen ($3.63) and cover slightly more than the first kilometer traveled, after which they increase 80 yen every 233 meters. Cab operators have submitted different requests for how much to increase the fares, NHK reported.