Sunday, January 06, 2008

Taxi as a service

ComfortDelgro gushed that its taxi drivers were already reaping 10% more in take-home earnings with the imposition of the new regime of fare hikes. That may be so at a time of festivities and parties - Christmas, New Year Eve and the New Year. Unusual times, unusual moneys.

But News are coming out that some taxi drivers are resorting to offering discounts because their business has fallen. The number of commuters that they used to ferry have simply disappeared so much so that some cabbies have even offered not to collect the 35% surcharge of taxi fares to entice people to take their cabs - not even the flat S$2 surcharge previously imposed. This shows that the extent of the fare increase is not quite right - its too high by all estimates. Some enterprising taxi drivers are resorting to more personal services to get the customer - something that harks of what I have been advocating some time ago, that the taxi services must revert to a more service-based approach where customers reward good service with tips. Mere imposition of a fixed rate will not be viable for either you don't charge enough, resulting in non-availability of taxis, or you charge too much, resulting in disappearing commuters.

Singapore's private cars are so expensive that the taxi is an alternative. There is no question that taxi services will continue to be in demand. But when one charges a fare that makes the difference between owning a car and taking a taxi insignificant, it will be easier for a person to choose to buy a car. Already we have Geely cars, made in China cars, that sell at a price that requires a repayment of as low as S$240 per month. I remember my wife used to spend S$400 on taxis a month 6 or 7 years ago to and from work. Given the at least 30% increase in taxi fares now, I can easily make a case to buy a car, the price of petrol not withstanding. If hybrid or CNG cars become more common, the decision is even easier.

So where does this leave the taxi drivers? Well, more business for the coffeeshops, according to some, for they refuse to cruise around in their empty taxis trying to look for commuters and burning away money at the same time. Obviously a cuppa is more palatable.

Taxi associations are deliberating this and I hope they will decide with their street instinct and experience instead of the ComfortDelgro analysts trying their hand at social engineering and apparently getting an F for their effort.


Anonymous said...

Boycott the use of Taxis until they reduce the fares. It's ridiculous and they know it. This industry is nothing but another oligopoly and price fixing mechanism that only benefits the taxi company & their management whilst the risk is transferred to the poor taxi driver! Wasn't it in the news some years ago that one of them earned like S$1.43 mio in a year?

Epilogos said...

These taxi drivers have their hands tied behind their backs. The 'authorities' have come out to say that any initiatives by drivers to offer discounts, not collect surcharges, etc. are not allowed.

I don't know of any law that says a taxi driver cannot collect less. For sure he cannot collect more. So our taxi drivers are no more than salarymen after all, driving a car, worrying about the next passenger, taking care that he won't be involved in an accident, etc. etc. - taking all the risks while their real paymasters sit in the comfort of their offices.

Something is not quite right here.

Stansted Parking Meet and Greet said...

It's very interesting to read about how the taxi business is run in other parts of the world. Here in England I work for Stansted Taxi Service and we all compete for the same business so we need to offer special offers.

In St Kitts, where I lived for a few years all the taxi prices are set by the government.

Have a look at my blog for more information.