Friday 26 September 2014

Disappearing taxis: No simple solution to cab crunch

Some suggest scrapping all surcharges
By Jermyn Chow, The Straits Times, 25 Sep 2014

DITCH all surcharges, impose all-day levies at far flung places or introduce even more surcharges to solve the longstanding problem of disappearing taxis just before the peak period.

These are some of the solutions that experts, industry players and taxi drivers have suggested, after the issue resurfaced recently.

The Straits Times reported on Sept 8 that cabs at Changi Airport went missing just before peak-hour surcharges kicked in, leaving travellers waiting for more than 30 minutes for a cab.

The Straits Times received more than 10 Forum letters on the issue of how best to solve this problem.

Although surcharges were meant to better match supply and demand, many, like cabby Colin Wong, have called for peak-hour and location levies to be axed.

Their rationale? Cabbies already know where and when passengers need cabs most, so there is no need to incentivise them.

"We know where and when passengers need cabs... We will still go to where there will be demand and business," said Mr Wong, 53, a cabby of nearly 10 years.

Removing all surcharges will placate commuters who are unhappy about the current fare structure, which they say is confusing.

There are close to 10 different flag-down fares, three metered-fare structures, more than 10 kinds of surcharges and eight types of phone-booking charges.

Senior Minister of State for Transport Josephine Teo said last November that the Government is looking at simplifying the current taxi fare structure to make it less confusing for commuters.

But earlier this year, she said this might lead to higher taxi rentals and fares - a possible result of covering the shortfall that drivers face when the surcharges are removed, experts explained.

When contacted, the Transport Ministry said it is still "studying this carefully to ensure that taxi commuters and drivers are not worse off if any changes are made".

SIM University urban transport management expert Park Byung Joon backed the idea of simplifying the fare structure but keeping the airport levy intact.

"Unlike shopping centres in the middle of city, the airport is away from the city centre... There must be an incentive for taxi drivers to go to the airport."

Dr Park said the airport surcharge could be tiered according to plane arrival schedules to give cabbies more incentive to go when cabs are needed.

Transport economist Michael Li from Nanyang Business School said the difficulty is deciding on a surcharge amount that does not result in a cab crunch elsewhere.

"It's a basic service standard, but it should not make it a disincentive for those plying in the city," he said.

Experts noted that removing surcharges would be a massive exercise. In the interim, companies could add more surcharges to fix the current problem.

However, Mr Ang Hin Kee (MP for Ang Mo Kio GRC), who is also an adviser to the National Taxi Association, said this was a multi-faceted problem.

He pointed out that the industry is deregulated and cab companies are left to set their own fares and surcharges to be "more responsive to market conditions".

"Cab operators and taxi drivers are currently operating within the tight parameters of a competitive fare and revenue environment and there is not much room for adjustment.

"If you want to do anything, it may deviate from being the deregulated market that we have today," said Mr Ang.

Raise basic fares, remove surcharges

I AM a taxi driver and I would like to raise a few points for the public to consider ("No 'disappearing act' by taxis" by Mr Raymond Ong Thiam Khoon, Sept 12; and "Track, punish cabbies who 'vanish' before peak hours" by Mr Matthew Ong Koon Lock, Tuesday).

It is lucrative for cabbies to ply the road at certain times and at certain places because of the many surcharges. If you were a taxi driver, would you:
- Rest, take your meals, do your personal errands or change shifts during these lucrative periods?
- Pick up passengers just outside the Central Business District, where there is no city area surcharge?
- Ignore the calls that come in and forgo the booking fees, and pick up passengers on the street?
In countries like Japan, Germany, Australia and Britain, their basic fares are extremely high but there are hardly any surcharges. Thus, there is no obvious "lucrative" time and place for cabbies to pick up passengers.

Singapore taxi fares are among the lowest in the world, if the cost of a taxi is taken into consideration.

In the countries I mentioned, car prices are about 25 per cent of prices here. However, their taxi fares are about three to five times our gross fares.

Even if whole-day surcharges were implemented islandwide, Singapore taxi fares would still be a bargain.

Obviously, the costly basic fares in these countries curb demand, but they are enough to lure cabbies to where there is business.

Our authorities can learn how to ensure taxi availability from these countries.

Wong Hing Kim
ST Forum, 20 Sep 2014

Track, punish cabbies who 'vanish' before peak hours

ONLY a small number of cabbies perform "vanishing acts" before peak-hour surcharges kick in ("Curbing cabbies' vanishing act"; last Friday).

The authorities introduced these surcharges to moderate cabby behaviour - and have been too successful. Now, cabbies know when and where it is lucrative for them to pick up fares. They have also learnt to lie low during off-peak periods.

Cab companies can easily identify cabbies who disappear by tracking their Global Positioning System (GPS) units. It is a sign that something is amiss if cabs are idle for long periods, or if drivers switch off their GPS units.

Penalising cabbies by not allowing them to accept call bookings for a certain period does not work. More robust and sterner measures need to be considered.

Putting more taxis on the road is also not the answer.

Matthew Ong Koon Lock
ST Forum, 16 Sep 2014

No 'disappearing act' by taxis

I HAVE been driving taxis for more than 15 years and have noticed that whenever commuters are unable to get cabs, fingers are pointed at taxi drivers for "hiding" ("Taxis 'vanishing' from airport queues before peak hour"; Monday).

I seldom read about the plight of taxi drivers who have to queue for hours at the airport, or drive around the city in the late evenings trying to pick up passengers.

With high vehicle rentals and operating costs, it does not make sense for taxi drivers to "disappear" and wait for peak-hour surcharges to kick in.

During peak hours, taxis are required islandwide and cabbies do their best to pick up as many passengers as possible, despite the road congestion that slows down response or turnaround time.

Even with the call booking system and third-party apps, it is difficult to match the high demand for taxis during peak hours with supply.

When passengers cannot hail a taxi, it is not because taxis are doing a "disappearing act". It is simply a case of demand outstripping supply.

I hope commuters are able to understand that taxis cannot be everywhere all the time, especially during peak hours.

Raymond Ong Thiam Khoon
ST Forum, 12 Sep 2014

Taxi apps: Boon or bane?
By Christopher Tan Senior Correspondent, The Straits Times, 31 Oct 2014

THE way investors are falling over themselves to put hundreds of millions into taxi apps, you would think they had found a cure for cancer.

In just a little over three years, more than a dozen of these companies promising to find you a ride when you need one have sprouted across the globe, sucking billions in venture capital and grabbing headlines everywhere.

But will they deliver the change they promise or will they fizzle out like the tech start-ups that mushroomed in the late 1990s?

On Wednesday, London-based Hailo announced that it has raised more than US$100 million (S$127 million) since it started three years ago.

Interestingly, it has also managed to get SMRT Corp onboard - despite being a direct competitor to the local operator's taxi dispatch business.

Last week, GrabTaxi, which started in Malaysia (also three years ago) said it has secured US$90 million in funding just this year.

Easy Taxi, backed by German Internet start-up Rocket, has likewise propelled itself forward with US$100 million raised.

They are matched by a number of other apps in Asia, like TaxiWise (Hong Kong), OlaCabs (India), PingTaxi (Vietnam) and Blue Bird (Jakarta).

The biggest, according to online news provider Tech In Asia, may well be China's Didi Dache and Kuaidi Dache, which have attracted huge funding from Chinese tech giants such as Tencent and Alibaba.

But they pale in comparison to Uber, which has raised US$1.5 billion from investors - including Google - since it started up in San Francisco in 2010. The company is said to be valued at US$18 billion today.

And according to estimates by, calculations based on leaked information alluded to Uber enjoying an annual profit of over US$200 million on the back of US$1 billion in revenue. Not bad for a four-year-old start-up.

No wonder others such as Lyft, SideCar and RelayRides have jumped on the bandwagon. More will do so. And more will want to come to Singapore.

On a per capita basis, the Republic has one of the biggest taxi populations in the world, and its cab patronage also ranks as one of the highest. Some 28,000 cabs here cater to 970,000 rides a day in a city of 5.4 million. In Hong Kong, where 7.2 million people live, 18,000 cabs cater to one million rides a day.

So there is clearly money to be made. The question is: What is in it for the commuter?

While hard numbers are unavailable, anecdotal evidence suggests that the public is warming up to the newcomers nicely. The hip are now "Uber-ing" instead of "cabbing", and it is common to find the GrabTaxi icon alongside YouTube and Facebook on smartphones. Users cite ease of use, decent response time and "live" tracking of a dispatched taxi that gives a measure of certainty while you wait.

While booking rates are pegged close to what the incumbents are charging, they are likely to fall as competition hots up.

Already, these newcomers charge cabbies less for dispatches than established operators like Comfort and CityCab to win them over.

But what happens when competition intensifies, with, say, five to 10 apps jostling for business? This may lead to a fragmented market, as app providers devise ways to block out other apps.

This is already happening. Easy Taxi has accused GrabTaxi of blocking its app. Similar accusations are flying in other cities between app providers.

So, at the end of the day, the commuter may be back to square one, where he is held hostage by an app he has chosen to download. This limiting factor will apply to cabbies too, unless they want to end up holding multiple smartphones.

The ideal situation would be to have a single app that reaches out to all available taxis in the vicinity. But that is as unrealistic as having a unified call-booking centre. It simply goes against the principle of competition.

The Land Transport Authority, which has long subscribed to "managed competition" in the public transport sphere, seems uncharacteristically relaxed when it comes to the new apps.

Taxi operators question whether the playing field is level. After all, the newcomers are not governed by the strict safety and service standards set for the cab industry.

There have also been calls for crackdowns on regular motorists roped in by app companies to provide "limo" services. This enlarges the pool of drivers that players like Uber and GrabTaxi can tap into.

But it is clearly against the law, as it exposes the commuter to risks, with lack of recourse in an accident being the least of his worries.

For instance, there is no stopping a predator slapping on an Uber sticker on his car and cruising near a primary school.

A number of cities have banned such apps. Most recently, Germany banned Uber, saying its services violated the Passenger Transportation Act because its drivers do not meet criteria such as a health examination.

Early this year, Shanghai followed Beijing's lead by banning cabbies from using taxi apps during peak hours. Apparently, drivers were shunning street hails in favour of app bookings, which were more lucrative. Sounds familiar?

Trial at taxi stands to match queues with cabs
By Yeo Sam Jo, The Straits Times, 31 Oct 2014

HEAT sensors and cameras have been deployed at seven taxi stands here in a bid to better match taxi supply with demand.

The equipment is part of a new system rolled out yesterday in a year-long trial costing $300,000, and which can detect the number of commuters in a taxi queue as well as calculate average waiting times.

For a start, the system is being tested at HarbourFront Centre, Hitachi Tower, Keck Seng Tower, Lucky Plaza, Ngee Ann City, OG People's Park and VivoCity.

The Land Transport Authority (LTA), which is conducting the trial, said the system's server will send out SMS alerts to all six taxi companies here when a queue of 15 or more people forms at these locations, and when the average waiting time exceeds 15 minutes.

It added that this algorithm will be "calibrated when necessary" during the trial.

"The call centres can in turn broadcast the information to their drivers to encourage unhired taxis to call at those taxi stands with high demand," said the LTA in a statement yesterday.

Commuters can view video screenshots of the queues at these locations at and through the MyTransport.SG mobile phone application.

Commuter Eleen Khoo said that the video footage of taxi queues would come in useful.

"You won't waste time walking to a taxi stand only to find out that there are so many people there," said the 25-year-old, who is self-employed.

Information on the average waiting times at these taxi stands will also be available by the end of the year.

An LTA spokesman said that it will evaluate the trial based on improvements in waiting time, as well as feedback from commuters and taxi drivers.

Trans-Cab's general manager Jasmine Tan said that the new system will help drivers to locate passengers.

Mr Henry Tay, a 44-year-old cabby, said: "Sometimes, we don't know where to get customers. We end up doing a lot of empty cruising during off-peak hours."

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