23 November 2007

Taxi problem the result of 3 deadly sins

Why is the taxi problem so persistent? Why do passengers complain there aren't enough taxis, and taxi drivers complain there aren't even passengers to make a decent living? Full essay.


Sillyporean said...

My thoughts exactly.

The Han Songguang article you referenced was reluctant to criticise the taxi operators directly, using the heading "Taxi drivers bear all the risk" instead.

But I see them as the root of the problem. ComfortDelgro, being the biggest, is essentially a protected monopoly.

The recent clampdown is just PR smoke. No change of real substance will take place, and I assure you we'll still be complaining about the taxi problems for years to come.

Anonymous said...

Actually, it is also part of an overall control over the population. I am referring to control of people's movement. You will note that the mass transit mode, ie buses and trains routinely end at about midnight except perhaps on holidays, weekends and special occasions. Train and bus operators have more then adequate means to provide for transportation till the wee hours but choose not to.

Reason is rather simple. To ensure that the mass go home early, esp. on week/working days and not stay out late to the detriment of next day's work, law and order workload, etc.

It's part and parcel of making this country easy to rule.

Anonymous said...

The average driver has to put in roughly 9 hours at the wheel before he can cover his rental + diesel. In most other cities I believe this number is somewhat smaller, partiallly due to fuel subsidies in some countries, but mainly due to the simple fact that taxi companies are free to set the daily hire rates, i.e. a competitive market.

I appreciate the need for keeping flag-down fares low to ensure that taxis remain a relatively affordable means of public transport but my sympathies go towards the taxi driver who typically has no other employment alternatives, and yet are squeezed by high rental rates, low fares and on the overall, very risky job conditions.

Anonymous said...


Anonymous said...

Spot on Mr Bread! LTA has failed big time. The past transport minister and the current one are as crap as the MDA rap video!

Taxi fares aside, bus and MRT fares are also not as affordable as in the past.

Teck Soon said...

The taxi system is like a communist system. Long queues, artificial prices, undersupply, central management. The Soviets had to queue for bread, we have to queue for taxis. We have a Soviet taxi system.

Anonymous said...

However you also have to deal with the mindset of the taxi drivers as well.

If you change the system to a cost/profit sharing system where the company takes a fixed percentage of the daily earnings, the hardworking ones will complain that that they are being penalised for working hard!

The taxi driver median age group is such that they may find it difficult to accept changes.

There is another issue that I can forsee, currently the taxi drivers bank-in their rentals daily. How are we able to track how much he is supposed to bank-in if it is based on daily earnings?

If monitoring is not done correctly, it will lead to disputes or the taxi drivers could potentially lie to the companies and bank-in lesser amounts.

Anonymous said...

Spore's taxi problem is a microview of what's wrong in Spore. Instead of going to the root of the problem, LTA/Tpt Council apply fare surcharges & increase taxis fleets adding to traffic congestion & lower taxi earnings. To think that we have intelligent (& highly paid!) CEOs & policy makers - when it is simply basic economics of demand & supply. The root is the low taxi fares - great demand but does not adequately compensate taxi drivers. Also, demand is dependent on peak timings with lull periods in-between. Because of low fares, drivers aimed for peak periods with surcharges to maximize earnings & resting during lull periods. This creates availability problems which is not addressed by fare surcharges nor increased no of taxis on the road. There are 2 other problems which distort the picture further - 1, the taxi system & 2, ERP system. The taxi system is the key to all problems! It is a feudal landowners [Taxi cos] & sharecroppers [taxi drivers] system. The risk lies with taxi drivers as taxi cos earned a good return by hiring taxi out at a fixed rate. With low entry barrier for a taxi driver, there will always be demand to hire taxis. In economics, this situation is rent-seeking - no coincidence that most rent seekers are always Govt-linked concerns! Because GLCs are involved, the need for growing profits/increasing returns override the public & drivers' interests. In the last few years, the govt has added to its treasury, millions as they added 3 new taxi operators [Premier, Smart & Transcab]into the market (license, COEs, etc). The real losers were the taxi drivers as their share of the pie becomes smaller as taxi fleet expanded. No wonder, taxi drivers retaliate by devising new (but illegal!)cartel schemes to earn more from the unsuspecting public. This is pure economic behaviour.
ERP system is another distortion affecting taxi availability. It has become worse with multiple zoning along key routes eg. CTE & Orchard Road. ERP has the isolating effect of discouraging taxis from plying within the zone. The original intention of ERP was to manage peak traffic and reduce congestion in key routes. It has failed as traffic congestion continue to build due to 2 key reasons - 1, taxi fleet has expanded & 2, pte vehicle nos have increased. In short, treasury needs have priority over environment & social needs. Note: the increase in taxi/pte vehicle registration with earlier scrapping [3-4 yr life span] have generated huge inflows to treasury. Over-regulation is a symptom of a govt which has many fingers in the pie. HK has a public transportation system which is miles ahead of Spore's. Why? Cos in HK, public transport operators are privately owned & operated including MTR which was privatized. There the public transportation market needs, demand & supply are met efficiently without the many distortions that plagued Spore's system.

Anonymous said...

Some of the TIBS buses servicing the Western parts (e.g. Jurong) are easily over 20 years. They are so old and smelly.

Oh and they don't give a shit how long the peasants wait - sometimes it's half an hour of wait and then two buses of the same number appear together.

The strange thing is, in the eastern parts, it's mostly SBS buses and these usually new and well-maintained.

Alan Wong said...

I think one possible solution that can really help to alleviate many of the taxi problem is to liberalised the whole taxi industry on the simple concept of supply and demand based on market competition.

By all means let these taxi operators continue to operate but if given this option to become the owner of their own taxi without having to pay the exorbitant hire rate fixed by the taxi operators, I am sure many taxi drivers would give these taxi companies a run for their money which will definitely improve on the service standards. By then, I believe any taxi problem will just be ironed by itself through mere market supply and demand.

I also strongly believe the Gahmen, being linked to the GLCs owning the taxis, is just the devil itself in creating many of the root problems that we are facing nowadays. It's just a matter of how really keen are them in solving this periennel problem of taxi woes.

RKCK said...

Yup.. 90 bucks-a-day rental. On a 30 day month, that is 2.7k. No medical leave. No annual leave. No year end bonus. Taxi companies earn a nice profit and we have overstressed and overworked taxi drivers.

Increasing the fares may not see an increase in earnings for the taxi drivers. Basic supply demand includes the pricing. Increase in pricing makes demand drop?

The peak hour booking fees is high enough to tempt the drivers to wait for a taxi booking rather than to stop for a flag-down passenger but is low enough for customers to jam the booking lines. What is you get is high demand for cab booking and the notion for the cabbies to know that there are people booking and it makes more economical sense to wait for a booking. Its really amazing to see empty cabs plying the road during peak hours with little cabs stopping for the flag down passengers.

And I don't even want to comment on ERP. The regulators are not regulating the correct regulations. Just plain ridiculous.

Anonymous said...

about the per booking fee: the reason does not appear to be to cover the comapany's cost in making each booking, since the cost of the booking system is already covered in the general operating expenses (which the cab drivers pay for through their daily rental) but is paid to the driver as incentive to take on and stick to a booking

it seems that the logical solution is to charge customers a much higher booking fee, and pay only part of it to the driver, at the same time reducing cab rental (and taxi fare); how acceptable customers will find this logic, however, is another question