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TAXI TARIFFS: Keep taxi fares in line with inflation or risk industry shifting into reverse

Updated: Jul 24, 2023


Image credit: Dynamo Taxis

Taxi tariffs are at the centre of the taxi industry. Various factors, such as fuel costs, vehicle maintenance, insurance, fees and regulations dictate how high, or low, tariffs are set to achieve a cabbie’s living wage. Taxi tariffs also reflect the supply and demand of the market, as well as the quality and safety of the service.


However, taxi tariffs are not static. They change over time, depending on the economic conditions and the cost of living. One of the most important factors that affects taxi tariffs is inflation. Inflation is the general increase in the prices of goods and services over time. It reduces the purchasing power of money and erodes the value of income and savings.

Inflation affects both taxi drivers and passengers. For taxi drivers, inflation means higher expenses and lower profits. For passengers, inflation means higher fares and, in some cases, if their own income doesn’t rise with inflation, lower affordability. It is however essential that taxi tariffs rise in line with inflation, to ensure a fair and sustainable taxi industry.


Raising taxi tariffs in line with inflation has several benefits. Those benefits affect not just taxi drivers, but passengers too. First, they help to attract new taxi drivers to the industry. Driving a taxi is a demanding and risky job, that requires working long hours. Working even longer hours to cover rising costs, is quite frankly not possible and can be dangerous. If taxi tariffs do not keep up with inflation, many potential drivers will also be discouraged from entering or staying in the industry, leading to a shortage of supply and a decline in service quality.

Second, they help to maintain and improve the condition of taxis. Taxi drivers need to invest in their vehicles regularly, to ensure they are safe, comfortable and efficient. If taxi tariffs do not keep up with inflation, many drivers will be unable to afford the necessary repairs and upgrades, leading to a deterioration of the fleet and a loss of customer satisfaction.

Increasing taxi tariffs in line with inflation should not be seen as ‘greed’. It is a necessity imposed by economic reality. Taxi drivers do not want to price their passengers out of using their service, neither do they want to lose competitive edge with other forms of transport. They do however want to provide a reliable and affordable service that meets customers’ needs and expectations... that can rarely be achieved on a shoestring budget.


The Government must take measures to curb inflation and protect the purchasing power of its citizens. For those falling behind inflation, Government should provide subsidies or assistance to low-income or vulnerable groups who depend on taxis for their mobility and livelihood.


The cost of living, now fuelled by crippling interest rates for homeowners and borrowers, is biting most sections of community.

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