Zit Seng's Blog

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Taxis Can’t Run, Wants To Outlaw Running

It’s no secret, taxis are feeling threatened by the likes of Uber and GrabCar. While private-car hire services are finding new innovative ways to compete, taxis seek to revert the playing field so that they have, in a manner of speaking, a home field advantage. Private-car hire services are a really useful complement to taxis. Please don’t mess things up.

Taxi stand

I was a little disappointed that Transport Minister Khaw Boon Wan appeared to be sympathetic to taxi drivers. He’s a politician, I suppose he has to try to be nice, or at least try to appear to be nice, to everyone. So it is only politically nice that he says the government will review the situation.

The National Taxi Association (NTA) has thus put together their wish list in a proposal. Demand, perhaps, to put it not so politely. NTA is asking for a bunch of things:

  1. Taxi and private-car hire drivers to be similarly certified and qualified. NTA cited the 60-hour vocational course and regular medical checkups required of taxi drivers.
  2. Private-hire vehicles to be identified, similar to taxis. Drivers to also have photo identification.
  3. Greater parity in the plethora of compliance costs, in reference to shelf life and regular inspections.

Is this what the NTA wants, to basically make private-hire car services somewhat similar to taxis? Then, I suppose, these private-hire car drivers ought to be similarly allowed to pick up street jobs, something which they are currently forbidden from doing? In this case, won’t they all just be taxis? There won’t be another class of transport options for commuters.

Is this what taxi drivers mean by levelling the playing field? They cannot compete with private-hire cars, so they want everyone to be taxis. They can’t run, so they don’t want running to be allowed. That is so unreasonable.

To be honest, I don’t think the taxi drivers just simply want a level playing field. It’s more likely they just want everyone else out of their playing field. No competition is their game.

Some of the issues that the NTA has brought up in their proposal aren’t even legitimate problems, in my opinion. For example, the 60-hour vocational course, is that really so great a problem that disadvantages taxi drivers? Isn’t this a one-time course? A course that, presumably, is required for someone to get qualified as a taxi driver, and hence no longer a burden for those who are already qualified taxi drivers?

They want private-hire cars to be identified. Why is that needed? In fact, it’s a nice feature that private-hire cars are just ordinary cars, not marked like taxis, which make them a different kind of service that appeal to some commuters. Uber and GrabCar aren’t taxis. Commuters already know the vehicle from their booking app, so there isn’t a need to mark the cars differently.

Then, NTA wants to have photo identification of the driver? Perhaps NTA’s Ang Hin Kee hasn’t used Uber or GrabCar. The booking app already has the driver’s name and photo. You get to know that before the car arrives. If you didn’t like the driver, you could even cancel your booking, before the car arrives. I’m not saying that’s something you should do.

In my opinion, the issue on compliance cost is the only real case that the NTA has. However, the Transport Ministry should be cautious and thread lightly on this matter. Taxis currently have a shorter shelf life of eight years, less than that of regular cars, and it makes sense because they are far more heavily used.

Should private-hire cars be slapped with a similar eight year shelf life? There are certainly two sides to argue this. Private-hire cars are likely far more used than regular cars, but I suspect not as much as taxis. Should we treat them like taxis, leave them like regular cars, or create a new category for them? My thoughts are to leave them as they are. There are already cars used on a commercial basis, with relatively higher usage than regular private cars, but we don’t have a special category for them.

If a new special category is created for private-hire cars, then we can expect the enterprising private-hire services to come up with a new ingenious way to workaround the increased cost to remain competitive. Something that’s perfectly legal, of course. These people thrive on innovation. They will find a way to compete. I know there’s a new service coming up that will do just that. They’ve simply brought online, with a mobile app, a service that has already existed in other forms.

We should be cautious about adjusting the compliance costs and associated tax structures of taxis. Taxis are recognised as a special category of their own because they are allowed by pickup street jobs. Private-hire car services are forbidden from picking up street jobs. This is a big advantage taxis have over private-hire cars. Taxis can take bookings, and when they don’t have bookings, they just pick up any street jobs that come by.

The problem is that our dear taxis are exceedingly fussy. They want the benefit of picking up street jobs when it suits them, but they far prefer to take bookings. I’m sure many taxi-riding commuters are thoroughly familiar with the situation. How is it that you can flag down 10 empty taxis in a row, but not a single one wants to go to your destination? How many times have you stood at a taxi stand, and found a taxi coming by with a predetermined destination service area, and not finding any passengers heading that way, just drives off? I don’t want to go into the problems with airports and pre-midnight service, but we all know about them.

I’m really delighted with services like Uber and GrabCar. I’ve not used Uber, but GrabCar has served me very well. It’s so easy to get a GrabCar. The drivers are even willing to pick me up when they’re like 3 km away, and sometimes given the area around my pickup point, I know the app’s estimated 5 mins is more like 15 mins. Private-hire car drivers like those of GrabCars are hungry for jobs. They work hard. They take whatever jobs they can get.

If our taxi drivers can be more competitive, we would not be having so many complaints about taxi services. If our taxi services have served commuters well, then there would be little demand for private-car hire services. I’m sorry, taxi drivers and taxi companies, you brought this problem upon yourself. Please learn to compete instead of running to the government to protect your business.

It’s also really puzzling why, if taxi drivers consider private-car hire services to have an unfair advantage, they don’t just quit their taxis and go over to presumably greener pastures? It’s not like they’re bonded to their taxi driving jobs right?

Every job, every company, every industry, they all face competition from new insurgents. Why should taxi drivers feel so privileged that their model of business must be protected?

Case in point: The year-end shopping season is coming up soon, and many of us will find ourselves buying online from overseas retailers. We buy from the US, Korea, China, Japan, UK, and many other countries, helped along by freight forwarders. Some retailers like Amazon, and more recently Target, are shipping direct to Singapore. Should our local retail businesses complain to our government that those practices are unfair and propose to ban or levy special taxes on those imports?

Private-car hire services are offering a really good alternative to mainstream taxi services. They fill a need where taxis have left us hanging. But there’s still going to be a need for taxis, so I don’t think taxi drivers need to fear that their business will be wiped out. They will definitely face fierce competition. Those who can’t take the heat, quit, and find another job.

Is there a real concern that the taxi business may become extinct? I suspect not, because the fact that we have taxi drivers complaining and not changing job suggests they want to continue with what they do. LTA may have an interest to ensure that there’re always going to be taxis plying the roads. Perhaps if extinction is a legitimate threat, LTA could make some light tweaks to enable the taxi business to remain viable.

Honestly, I think there’s still lots of room for taxis and taxi companies to compete and innovate, if only they care to. I see GrabTaxi offering numerous promotions and discounts including partnership with other companies, to attract users. How is it that our mainstream taxi operators can’t do the same? How is it that regular taxis have to levy an additional 10% surcharge on credit card payments, but GrabTaxi users don’t need to?

LTA has many problems on their plate to deal with. MRT is a big one. Unfortunately, this is one messy problem they have to fix themselves. Taxis are also a problem. But in this instance, they have the likes of Uber and GrabCar coming in to solve the problem for them. Please just let market forces do the work.

2 thoughts on “Taxis Can’t Run, Wants To Outlaw Running

  1. Isn’t there VICOM for servicing normal cars?
    Thanks for raising the importance of taking the taxi operators to task for not lightening the rentals (it’s almost the same rate as renting a car from AVIS :O ) while not doing much to help their drivers other than driving alternative employers off the road. Is this the world’s most business-friendly, global city, our home that we seek to build?

  2. Firstly, there is already a proposal to charge extra duty for goods ordered online and sent to Singapore… Sad

    On the topic of taxi, there is a big question on income tax that was never mentioned by anyone.

    For uber drivers, the cars cannot be used for any tax relief, even capital depreciations. But taxi companies can do it.

    Also, fuel and maintenance cost cannot be claimed for tax relief for uber drivers. Taxi drivers can.

    These 2 items alone makes a whole world of difference.

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