At a public hearing in June about increasing taxi fares, two choices were discussed: the option of increasing the starting price from 12 yuan ($1.86) to 13 yuan was the one that drew most attention.

The hearing highlighted the increasing economic pressures on cab drivers. Petrol prices are rising sharply; at nearly 8 yuan per liter it is double the price it was six years ago.

But increasing the basic fare will lead to fewer passengers using taxis, I believe.

This isn't helped by the fact that Shanghai now boasts a far reaching and highly developed metro network. To date, there are 11 metro lines connecting downtown with the suburbs, and covering 410 kilometers along 267 stations.

There is also the problem that drivers have to pay a substantial part of their earnings to their companies every month. If they are lucky enough to own their own vehicle and license, they will pay about 1,000 yuan per month to do business under the name of their employer.

However, the majority rent their cars from a taxi firm, which can mean paying more than 300 yuan a day. One cabbie I know jokes that he drives in the morning for the company, in the afternoon to pay for the petrol, and only at night for himself.

A decade ago, taxi driving was a "golden" industry for locals, but it is now no longer seen that way. Most of the drivers I know are from Shanghai's suburbs, have little education and do it in order to be able to make a decent living downtown. However, even suburbanites are now unwilling to do the job. Consequently the industry's increasing shortages are being filled by people from adjacent Jiangsu and Zhejiang provinces.

If the cost of purchasing a taxi is 100,000 yuan, the company can recoup its investment within a year. So the fees that the drivers pay after this is largely profit, according to some. However, taxi companies point out that they have administration costs, the depreciation costs of vehicles, management costs and social insurance payments to consider. They don't, however, open their financial accounts to scrutiny by the public and their management style is widely criticized as being inefficient and uncompetitive.

During the public hearing, there was another proposal to raise the 2.4 yuan per kilometer charge to 2.7 yuan, with the basic fare remaining the same. However, both proposals will mean higher fares for passengers.

I suggest taxi companies play a more active role in this consultative process. It would be a start if their finances were more transparent. They should also review their management systems in order to lower costs generally.

And if it's true that the industry is as profitable as many citizens suspect, could they consider lowering the fees drivers are expected to pay every month? I believe this would be a start in improving the lot of our ever more impoverished cabbies.