Taxi drivers left 'worse off' despite fare rises

This is a classic lagging pass-through story: regulated price increases are being applied to a revenue line that is much less elastic than the input cost shock, so the operator margin should still compress even after repricing. The first-order loser is the supply side of the local transport market, but the second-order effect is more interesting: when regulated incumbents cannot fully index to fuel, service quality and vehicle availability tend to deteriorate before headline fares do, which pushes the marginal customer toward private cars or app-based alternatives if they exist.

The hidden beneficiary is not necessarily another taxi operator, but any substitute tied to discretionary mobility spend. Over a 1-3 month horizon, consumers facing higher effective transport costs typically trim lower-value trips first, which hits late-night retail, hospitality, and event attendance before it shows up in broad consumer data. That creates a mild demand-destruction loop: fewer trips reduce driver utilization, which worsens unit economics even if posted fares are higher.

The regulatory angle matters because the absence of a temporary fuel surcharge is a signal that policymakers are prioritizing visible consumer relief over operator economics. That increases the odds of either informal rationing of service or a second-round request for another fare reset in 6-12 months if fuel stays elevated. The move looks underdone as a direct macro signal but overdone if extrapolated into a broad inflation read-through; this is a micro-regulatory margin squeeze, not a systemwide price shock.