Japan Govt Plans GPS Meters and Dynamic Pricing for Taxis

Yomiuri Shimbun file photo
The Land, Infrastructure, Transport and Tourism Ministry in Chiyoda Ward, Tokyo

The Land, Infrastructure, Transport and Tourism Ministry plans to accelerate its efforts to introduce “soft meters” for taxicab fare meters, sources have said. The aim is to increase drivers’ work efficiency and encourage dynamic pricing in taxi operations.

Unlike conventional taxicab fare meters that calculate travel distance based on the rotation of tires, soft meters calculate distance and fare from GPS information. With a soft meter system, drivers can produce daily work reports automatically, reducing their work burden.

The ministry intends to specify standards for soft meters in the Japan Industrial Standards, such as an allowable margin of error and the frequency of map updates, in order to encourage the introduction of soft meters in the taxi industry by securing quality. A study panel will be set up by the ministry as early as this summer.

The government has been researching soft meters since they were included in the Implementation Plan for Regulatory Reform in 2021.

Prototypes of soft meters produced by eight different meter makers were tested in November 2021, but performances varied, with the maximum margin of error for distance traveled at 14.48%.

Another function to be introduced with soft meters is dynamic pricing, which forecasts the demand for taxi rides based on the weather, day of the week and event schedules, and then automatically determines the appropriate base fare.

The ministry has already decided to introduce dynamic pricing in the taxi industry but will limit the use to journeys booked via taxi dispatch apps when the fare and destination are predetermined.

This is because changing base fares and other specifics in conventional fare meters requires system modifications.

If it becomes more flexible to set base fares and other specifics with soft meters, more taxi companies will use dynamic pricing, leading to full-scale proliferation of dynamic pricing in the industry.