"Taxi business" closures surge 1.6 times over previous year, "high fuel costs" hit management directly

"Taxi business" closures, 1.6 times previous year, "high fuel costs" hit directly

A cumulative total of 66 cases of suspension of business, closure, or dissolution (hereinafter referred to as "closures") of "taxi operators" were confirmed in fiscal year 2025. This represents a 1.6-fold increase from the previous fiscal year (40 cases), significantly updating the highest number ever recorded. The number of bankruptcies confirmed was 36, meaning a total of 102 taxi operators exited the market due to bankruptcy or closure. This is the first time since fiscal year 2000, when data became available, that the number of taxi operators exiting the market has exceeded 100. In addition to a shortage of drivers, soaring fuel costs, in particular, are squeezing profits, leading many operators to abandon business continuity.

Looking at the trends in bankruptcies and closures in the taxi industry, in fiscal year 2024, worsening driver shortages and the accompanying "decline in operating rates = surplus taxis" often hampered management. On the other hand, in fiscal year 2025, the driver shortage was compounded by soaring fuel costs, such as LP gas, making it difficult to secure profits. This made it impossible to implement sufficient wage increases, leading to a vicious cycle where it became even more difficult to recruit and retain drivers.

Looking at the profit and loss trends of taxi operators whose profits were known for fiscal year 2024, the percentage of companies that saw "increased profits" (on a net income basis) from the previous year was 33.4%, a significant drop from fiscal year 2023 (41.5%). On the other hand, "decreased profits" (25.1%) exceeded 20% for the first time in five years, and "deficits" (40.1%) reached 40%. The proportion of "deteriorating performance," which combines decreased profits and deficits, exceeded 60%. The proportion of deteriorating performance is expected to remain high in fiscal year 2025 as well. In the taxi industry, fare revisions were implemented in many regions, and there was a sharp increase in demand for dispatch services due to an influx of users from ride-hailing apps and an increase in inbound tourists. Especially in tourist areas, the environment was conducive to increasing the average spend per customer through measures such as setting premium fares, introducing flat-rate and charter plans, and fixed-rate transfers from airports and stations.

However, many operators are facing a situation where many drivers are retiring due to aging, while new drivers cannot be recruited. As a result, even if there are taxis available, they cannot be operated, leading to missed opportunities for the increasing demand from late-night customers and tourists for medium-to-long distance rides, and many operators are seeing their revenue per distance stagnate. Amidst this, in addition to fuel costs such as gasoline and LP gas, fees generated by the widespread use of cashless payments, and a significant increase in labor costs due to wage hikes, there were many cases where even with increased revenue, the increase in costs could not be absorbed, resulting in decreased profits or deficits.

Currently, due to a shortage of potential drivers, smaller operators are finding it difficult to recruit and retain staff, and there is a situation where improving operating rates, which are essential for improving profitability, is not progressing easily. As larger operators with more resources proceed with driver recruitment by offering better salaries and working conditions, and increase sales by improving operating rates and average customer spend, the disparity between efficient larger operators and smaller ones is expanding, potentially leading to an increase in closures among small and micro taxi businesses.