But the proposal said the subsidies would not be available if the fare re-adjustment came into effect.

While taxi companies are hailing the possible fare rise, China Daily's random survey yesterday on six taxi drivers from six different companies showed that none of them would be happy with the increase.

"A price rise will mean a fall in customers," said Han Baozhu with the Yuyang Passenger Transport Company. "I figure I will lose at least 20 per cent of my customers."

He said a cut in drivers' management fees that have to be given to the taxi companies would be a better way to offset the cost increase. He said his company collects a monthly management fee of 5,800 yuan (US$716) per car, while new taxi only costs 90,000 yuan (US$11,100).

"They need only 15 months to take back the cost, but each car can be used for eight years."

A telephone survey by China's Social Survey Institute on 200 Beijing residents shows that 72 per cent of them are against the possible fare rise. About 68 per cent of the respondents considered 1.2 yuan (15 US cents) per kilometre rate to be a reasonable price.

Wang Meng, an IT company employee in Beijing, said she would consider reducing her use of taxis if the fares increase. "If taxi fares rise, I may not travel by taxi as often as I do, or I will choose taxis without licences which charge much more cheaply."

It is estimated that there are at least 70,000 unlicensed taxis running in the city. Drivers with regular companies worry that the fare rise may push more passengers into illegal taxis.

(China Daily 04/20/2006 page3)

(For more biz stories, please visit Industry Updates)