Truths about Uber and taxis

comments     CY Ming     Published     Updated

Last August, Tourism and Culture Minister Mohamed Nazri Aziz was reported to have said, “We have no problem to regulate Uber and Grab because that’s what people want. We are being objective and we are guided by the interest of the public. The consumers are far more important in this aspect than taxi drivers. What people want and like to use are the main factors in our decision for Uber and Grab to be regulated, and there’s no way Uber will be banned.”

The statement was made after the cabinet had unanimously approved the proposal to legalise Uber and Grab e-hailing services. It was a correct decision as customers should always come first and the public should not be at the mercy of unlicensed operators.

A few days ago, Nazri had revealed that one of the main reasons to regularise Uber and Grab was because the cabinet didn’t want taxi drivers to allegedly cheat tourists any more.

This immediately drew the ire of the Malaysian Taxi Drivers Transformation Association deputy chairperson Kamarudin Mohd Husain, who rebuked Nazri for failing to emphasise that not all cabbies were guilty.

Kamarudin claimed that there had not been many reports of cheating by taxi drivers and there were only about two or three cases reported every year. But last April, he claimed the Land Public Transport Commission (Spad) has failed to act against over 18,000 taxi drivers with disciplinary issues in the Klang Valley alone.

Many associations claim to represent taxi drivers or public transport users but are nothing more than platforms used by individuals trying to exert their influence without contributing sound proposals for the betterment of the industry.

For example, a Spad survey revealed that 80 percent of the public preferred using Uber or Grab, which could easily be countered as it was made online. If the survey was conducted by the roadside and taxi stands, 80 percent would prefer taxis.

Those unwilling to accept truths about taxis and ride-hailing apps because of inconvenience can talk until the cows come home, but nothing will change unless they face reality.

The death knell for our local taxi industry started way back in 2008 when the Commercial Vehicle Licensing Board began issuing executive and budget taxi permits freely, flooding the market by 2009.

Many taxi drivers then were able to obtain individual permits and those who did not were either not qualified or bothered to apply. A pioneer taxi company could see the writing on the wall and decided to concentrate on stage bus operations, while others continue to expand by hogging more permits.

In August 2014, UberX was introduced in the Klang Valley with a starting fare of RM1.50, RM0.55/km and RM12/hour when budget taxi fares were RM3, RM0.87/km and RM17.14/hour. In March 2015, budget taxi fares were raised to RM1.25/km and RM25/hour but many taxi drivers earned less, as many passengers had switched to Uber or Grab.

With Uber’s entry, the biggest taxi conglomerate operating more than 4,000 taxis in the Klang Valley and Johor knew it will soon be game over, as licensed taxis will not be able to compete with the business model introduced by Uber.

Home-grown taxi app, MyTeksi, which was launched in 2012, quickly morphed to provide ride-hailing services to compete with Uber, and it had succeeded not just in Malaysia but also in the region.

Phenomenal and unprecedented growth

But the growth of Uber in terms of company valuation was phenomenal and unprecedented. In 2011, the transportation network company was valued at U$60 million. Speculative investors are pushing it past the US$70 billion valuation, making it 1,166 times more than it was six years ago.

This was despite the fact that it lost US$3 billion last year, which was no surprise really as Uber went all out to grab market share right from the start. Last December, an investigative report revealed that on average, passengers were only paying 41 percent of the actual cost of a trip.

As such, it would be futile to call on taxi drivers to improve their services as passengers using mobile apps would opt for ride-hailing services and not licensed taxis that cost more. There are more than a dozen taxi apps available locally but will not be able to compete with Uber or Grab.

It should be noted that drivers using mobile apps, regardless of Uber, Grab or taxi apps, are automatically in their best behaviour or they risk being disconnected swiftly should a valid complaint is lodged against them.

It is the fear of being caught that dictates drivers’ behaviour, and little to do with training or discipline. The same person selling nasi lemak in the morning and driving a taxi in the afternoon can be a Jekyll and Hyde, and likewise for a taxi driver switching to Uber.

International travellers using Uber would naturally prefer the same app in Malaysia. The cabinet’s decision in allowing ride-hailing apps showed that the government is visitors-friendly. But the authorities were caught flat-footed, allowing many companies operating in cyberspace to do business in Malaysia without proper licensing and paying local taxes.

Until ride-hailing services are regulated, they are still illegal and the government should not go overboard to mollycoddle them, as treating unlicensed businesses in such a way sets a dangerous precedent.

As for taxi drivers, some of them still think the world owes them a living. Those who wish to earn a decent living should switch to driving heavy vehicles such as buses and lorries. For example, professional drivers in companies registered with the Association of Malaysian Hauliers earn between RM3,000 and RM7,000 monthly.

Those who stubbornly hang on to their taxis are only getting what they deserve. On the other hand, elderly taxi drivers should be allowed to continue earning pocket money, and many are found queuing patiently at taxi stands.

Finally, taxi drivers that exploit tourists or threaten passengers should be stopped. They should be sent to mental institutions before they cause more harm to others and even their loved ones.

According to the 2015 National Health and Morbidity Survey conducted by the Health Ministry, 29.2 percent of Malaysian adults suffer from mental health issues. The percentage is much higher for taxi drivers as the majority are too undisciplined to work as employees.

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