The Shanghai Price Bureau will hold a hearing in the middle of next month to discuss a plan to increase taxi fares to cover rising gasoline prices.

The hearing will look at setting up a system to allow taxi rates to float with fuel prices in order to reduce the influence rising oil prices have on cab companies and taxi drivers.

The bureau hasn't said how much it is looking to raise fares, or when the new pricing system could go into effect.

Twenty-one people will be invited to the hearing, including representatives from the Shanghai People's Congress, the Shanghai Committee of China People's Political Consultant Committee, the City Workers' Union, the local Consumers' Protection Commission and government officials and scholars. Five passengers and three cab drivers with at least three-year experience will also be invited to attend, along with the leaders of taxi companies in the city.

The last time the city changed taxi fares was in 1998, when the drop rate was raised from 14.4 yuan (US$1.79) to cover the first five kilometers of a trip, to 10 yuan for the first three kilometers, according to Xu Yao, head of Dazhong Taxi Company.

"Increasing gasoline prices, which are a major cost for us, are making a great difference to the taxi industry," said Xu, adding that taxi companies and the government are subsidizing rising costs.

Currently, each cab receives a 550 yuan subsidy a month, of which 200 yuan is provided by the government and the other 350 yuan is put up by taxi companies themselves. The money helps drivers make ends meet, although many say rising gasoline prices have severely cut back their incomes.

(Shanghai Daily March 31, 2006)