In Japan, the average salary for taxi drivers in their early 20s approached 5 million yen (approximately $43,540) last year, exceeding the average for the same age group across all industries by more than 1.2 million yen. Improvements in working conditions, driven by fare increases and expanded performance bonuses, along with the rise of taxi-hailing apps, have enabled less experienced drivers to efficiently pick up passengers. The influx of younger workers into a sector previously dominated by older drivers is also notable.
According to the Nihon Keizai Shimbun on August 26, the average salary for taxi drivers in 2025 was reported at 4,508,200 yen, a 9% increase from the previous year (compared to a 4% increase across all industries). The average salary is about 1 million yen lower than the overall industry average of 5,455,600 yen, largely due to the prevalence of older drivers who tend to work shorter hours.
However, when focusing on the 20-24 age group, the situation changes. The average salary for taxi drivers in this age bracket was 4,833,600 yen, which is 34% higher than the average for all industries in the same age group, which stands at 3,613,700 yen. This figure represents a 36% increase compared to 2019, before the COVID-19 pandemic.
For instance, a 23-year-old male driver working for Sanwa Transportation in Tokyo earned about 700,000 yen (approximately $6,090) last month in his second year on the job. He noted that while his working hours are long, the alternating day-off schedule provides many rest days, which is a significant advantage.
The increase in taxi drivers' earnings is attributed to a positive cycle initiated by fare hikes. Taxi companies are not solely benefiting from increased revenues; they are actively reinvesting in their drivers by raising base salaries and performance bonuses. As earnings improve, motivated younger workers are drawn to the industry, and as they achieve better performance, company revenues rise, further boosting average salaries for drivers.
Additionally, taxi-hailing apps have helped bridge the experience gap for younger drivers. In the past, drivers who roamed the streets to find passengers relied heavily on their knowledge of high-demand areas and times. However, apps like 'GO' and 'S.RIDE' connect nearby taxis with passengers, allowing less experienced drivers to efficiently pick up fares.
'GO' launched its service in September 2020 and has surpassed 40 million downloads this month. In Tokyo, Osaka, and Kanagawa, vehicles available for 'GO' calls account for over 60% of all taxis. The success is reflected in the occupancy rate (the percentage of total driving distance covered while carrying passengers), which in Tokyo increased from 39.0% in 2020 to 47.5% in 2024, surpassing the pre-COVID level of 46.7% in 2019.
The rise in income is leading to an influx of younger workers. According to the Japan Taxi Association, 1,481 drivers who graduated from school and joined taxi companies in the 2024 fiscal year represents a 39% increase from the previous survey in the 2022 fiscal year. As of 2025, the average age of taxi drivers in Japan remains at 56.8 years. The increase in younger drivers may be the first step in addressing the chronic aging and labor shortages in the taxi industry.
* This article has been translated by AI.
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