Why are taxis in Japan so expensive?
3 Answers
The high cost of taxis in Japan can be attributed to several factors, including low demand. Here are the main reasons why taxis are expensive in Japan: 1. Low demand: Japan has a small land area and a large population, especially in densely populated cities like Tokyo, where rail transportation is highly developed. The density of rail lines in Tokyo is approximately 1.5 times that of New York and 7 times that of Hong Kong. As a result, people prefer the convenience and punctuality of rail transportation for their daily commute. The extensive and efficient train system makes taxis less necessary for the general public. 2. High costs: Labor expenses, fuel costs, vehicle prices, inspection fees, maintenance costs, taxes, and insurance all contribute to the high cost of taking a taxi in Japan.
Taking a taxi in Japan during my trip felt really expensive, with the starting fare close to 700 yen, and additional charges per kilometer afterward. The reasons include the high-end nature of the taxis themselves, commonly using luxury models like the Toyota Crown, which leads to high maintenance and upkeep costs; Japan's fuel prices are expensive due to reliance on imported oil; plus, drivers' wages are not low, there's little industry competition, and companies rely on high fares to recoup costs. I recommend taking fewer taxis and using the JR Pass for trains or buses instead, which are much cheaper than taxis. If available, overnight buses can also be a substitute in the evening—don’t waste money on taxis. If you must take a taxi, try booking through an app for fixed rates or wait for promotional periods.
As a long-term resident in Japan, I've found that the high cost of taxis primarily comes from cost allocation. Fuel prices are steep, averaging over 150 yen per liter of gasoline; drivers earn around 300,000 yen monthly, higher than in many countries. More importantly, taxi licenses are scarce, requiring companies to spend heavily on permits, driving up operational costs. Vehicles must be equipped with fully automatic doors, which also increases maintenance expenses. Nighttime rides incur an additional 20-30% surcharge, and taxis are harder to find on weekends when demand is low. Overall, this is tied to Japan's high cost of living. I recommend using public transportation IC cards to accumulate points or opting for shared bikes for daily commutes.
