Taxi operators, wake up your ideas

There have been a slew of ST Forum letters on the issue of taxi drivers suffering during a downturn. This is the best-written one that I’ve read so far in the Straits Times.

 

March 4, 2009

High cab rentals and surcharges akin to price fixing

LAST Saturday’s letter, ‘Lowering taxi fares won’t help cabbies’, reflects the perennial controversy over public transport fare structures.

The common practice of large taxi operators charging high rentals on cabbies and unilaterally imposing phone- booking fees and other surcharges on commuters is akin to price fixing and against the spirit of the Competition Act.

There is no logic in imposing Electronic Road Pricing (ERP) charges on taxis when they are bona fide ‘public transport’ vehicles and not private cars. Our lawmakers should correct these anomalies. Only when rental is reduced to a fair level, say a 30 per cent cut, and all surcharges abolished, with no ERP charges, would taxi fares come down to ‘affordable’ levels.

To revamp the taxi industry, we should look at the time-proven, meter-based and regulated single-fare system in Hong Kong, where 90 per cent of taxis are owned by individuals.

Each cab there makes 61 daily passenger trips, while a Singapore cab does about 37 trips. We have 24,000 taxis while Hong Kong has only 18,000. Sad to note, we do fewer daily trips despite having more cabs. It means that our taxi fleets are not efficient in picking up passengers on the roads.

At the same time, cabbies are struggling with customer-unfriendly impediments. In terms of the compound passenger load factor, Hong Kong cabs perform 2.2 times better than us.

Perhaps, we need to do some retrospective study on the merits or demerits of deregulation. Profit for shareholders is the prime objective of listed corporations. Allowing taxis to come under the control of two large listed corporations may not be in the best interest of the public after all. If we don’t revert to a simple meter-based fare system regulated by the Ministry of Transport and eliminate all impediments in the system, we would be perpetuating the burden on customers and cabbies.

Paul Chan

One issue in Singapore is that public transport is controlled too much by the government (or people who used to work in the government) and I will bet my bottom dollar most of the policy makers involved do not take buses or MRT regularly.

Yes, you’ll have a minister or two saying they took the bus to check out the situation (when they give media interviews) but do they end up taking the train or bus every day? Do they sit behind taxi drivers who look gloomy half the time and tell you their constant unhappiness about having their hands tied? Over the years, I’ve heard so many taxi drivers complain about the high rental rates and it’s a real and serious issue.

Of course, when consumers use words like “price-fixing” on Comfort and SMRT, you can expect a defensive reply from their corp comms guys pretty soon. The role of PR in such cases is first, manage any damage control, but second, also to influence public opinion and company policy towards a more positive outcome.

Now, a PR manager will not be able to change company policies by a mere reply, but management has to remember public sentiment is built up about a company over many such letters. This is where public transport companies need to ask themselves – what is the “greater good” and are we interested in promoting it? Are we even interested in listening to what people have to say or do we just want to protect the stock price?

For goodness sake, taxi companies – lower rental rates where possible, because it’s the right thing to do. I believe it costs almost the same for a cabby to rent his cab vs a normal commuter to rent a car.

3 Replies to “Taxi operators, wake up your ideas”

  1. Yes, in the pricnciple the high fares is due to the high rentals. In HK, when you book a taxi, you actually get a discount of 20-30% depending on the length of the journey. In Singapore, you pay a surcharge instead.

    The higher rate of trips the taxis in HK can make is due to the willingness of the drivers to give a discount for bookings, instead of cruising the streets empty. Singapore taxi drivers on the other prefer to wait for the booking to get a surcharge, and only appear in quantity when there are extra surcharges, e.g. midnight fare, etc.. In essence, the taxi drivers get regular bookings from their regular customers.

  2. If I’m the transport operator, I won’t even response to the letter. No need to response when the outcome cannot be changed by the public.

    Damage control isn’t necessary when the competitive forces are weak.

    I’ve been to Hong Kong and must say that the cab fare is very reasonable. In fact, the car travels quite a while first before the meter even starts jumping.

    The problem with these companies serving the public is just one of being able to come with with a reasonable pricing and cost that can satisfy everyone. For starters, educating the public on the cost of doing business, and hopefully most of the cost are not actually insane profits for shareholders.

Leave a Reply

Your email address will not be published. Required fields are marked *