What’s Wrong With Taxis in Singapore?

I was flipping through our Land Transport Authority’s Land Transport Master Plan recently. A couple of statistics caught my attention. One of it is about taxis. According to the LTA, there are 5,129 taxis per million persons in Singapore. There are 2,642 taxis per million persons in Hong Kong. I’m extremely puzzled. In Hong Kong, if you accidentally wave your hand while standing at the road side, a taxi will very quickly pull up and stop next to you. Taxis are that plentiful in Hong Kong.

I want to ask: Why is it so difficult to find taxis in Singapore?

Singapore has almost twice the number of taxis per capita compared with Hong Kong! Where are all the taxis?

Do taxis cost a lot in Hong Kong, so much that people don’t take taxis? Well, it isn’t too much actually, particularly if you’re not going very long distances. When I was in Hong Kong last year, I had planned to take the bus from my hotel in Causeway Bay to Ocean Park. I went to the hotel concierge to check that my plan was right. The concierge was quick to suggest that I take a taxi instead. Considering that I was travelling in a group, the taxi would not cost much more than the bus ride.

So how much was the taxi ride from Causeway Bay to Ocean Park? HK$50. That’s about S$8.15. The equivalent taxi ride in Singapore would have cost S$6.15 (or S$7.69 if you consider the “peak” hour surcharges).

Comparatively, it costs 32% more (or 5% more) in Hong Kong for the cab ride. But, bear in mind the alternative public transport cost. According to LTA’s report, the average bus ride cost $0.67 cents in Singapore, and $1.11 in Hong Kong. So, buses are about 66% more expensive in Hong Kong! Also, using LTA’s report, MRT rides are 54% more expensive in Hong Kong.

What does that say? Taxis are a pretty good transportation choice in Hong Kong. Conceivably, there should be a rather healthy demand for taxis there. But the strange reality is that despite double the per-capita taxi numbers in Singapore, we’re finding it so much harder to locate a taxi here.

Something must be very wrong with our taxi “system” here.

Taxi drivers here are self-employed, earning their own fares. They, like anyone else, want to maximize their earnings. As a result, they become selective about their fares. They don’t want to pick up fares at certain times. They are unhappy about going to certain destinations. (Disclaimer: I generalized. Please pardon me.)

Some people have suggested that drivers work for the taxi companies. They earn a fixed salary. Then, won’t care so much about selecting fares, etc. But this is not a very good solution either. If they earn a fixed salary, then they are also not motivated to pick up fares.

So here’s my solution:

1. Taxi drivers are employed by taxi companies. They earn a basic salary, not fares from the passengers.
2. The drivers are rewarded based on the amount of time their taxis are occupied. As a result, they will try to drive as much as possible, and pick up any fares they can find.
3. The drivers can pick up fares from the street, or, be directed by their taxi company to pick up a fare (i.e. booking). To be fair to the drivers, the time needed to pick up that fare should be rewarded as well (i.e. the taxi is considered occupied).
4. The problem of having to send passengers to a far-away destination where there is lesser chance of finding the next fare is a tricky one to solve. However, since now the drivers receive a basic salary anyway, this issue may be partially mitigated. What we need to do is to find the right balance between the proportion of basic salary and the reward of keeping the taxi occupied.
5. When the driver is about to end his shift, he should stop picking up street fares. The driver should be “rewarded” (i.e. the taxi is considered occupied) for the time spent getting back to the taxi depot. During that time, the taxi company can also allot him fare bookings that are along the way.

Does that seem to make sense? I know, there must be more things that could do with some fine-tuning. For example, how do you ensure that drivers don’t purposely drive at unusually slow speeds, or take circuitous routes, just so as to maximize their “reward” time? I’m sure technology will help us mitigate, or even resolve, some of these problems.

Most importantly, I think the basic tenet of “paying” to keep the taxi occupied is sound. Drivers are salaried, but they are motivated to ensure their taxis are always occupied.