Game-changers for taxi and bus industries

comments     YS Chan     Published     Updated

Before the Land Public Transport Commission (Spad) was set up in 2010, the primary role of the defunct Commercial Vehicle Licensing Board (CVLB) was issuing permits to develop entrepreneurship, with public road transport planning taking a back seat.

CVLB’s priority may have been justifiable four decades ago but became increasingly untenable when commuters were bogged down by poor connectivity, severely impacting our nation’s productivity and competitiveness.

Spad became operational in early 2011 and swiftly drew up several master plans, including the National Land Public Transport Master Plan. The Greater Kuala Lumpur/Klang Valley Land Public Transport Master Plan included transformation plans for taxi and bus industries.

The biggest challenges for Spad were metered taxis and stage buses in Greater Kuala Lumpur, which encompasses Kuala Lumpur City, Ampang Jaya, Selayang, Petaling Jaya, Subang Jaya, Shah Alam, Klang, Kajang, Putrajaya and Sepang.

Earlier in 2009, CVLB granted many individual permits to taxi drivers, and huge number of permits were hoarded by several taxi companies. Although taxi fares were increased in August the same year, drivers’ income dropped because the market was flooded with taxis.

As such, Spad decided from the onset not to issue any metered taxi permit. The 1,000 Teksi 1Malaysia (TEKS1M) permits granted to individuals later were converted from those surrendered by taxi companies.

The initial model chosen for TEKS1M was the Proton Exora, which was touted as the ‘Asean best in class taxis’. TEKS1M was meant to replace all budget and executive taxis with 7,500 units running by 2015, but had fallen far short.

Just like taxi business, Spad’s well laid-out plans for the industry were also disrupted by technology. Uber entered the market in 2014 and managed to get many people driving private vehicles to provide taxi service without being fully aware of the risks involved.

Uber snatched away passengers from home-grown MyTeksi, which was launched as a taxi app in 2012, by offering RM1.50 as starting fare, RM12 per hour and55 sen per km when budget taxi fares were RM3 starting fare, RM17.14 per hour and 87 sen per km.

MyTeksi realised it could not compete with Uber using taxis and added cheaper private cars to its mobile app. Later, MyTeksi rebranded into Grab and an overwhelming number of customers chose GrabCar over GrabTaxi.

Uber and Grab went all out to compete and capture market share by subsidising fares. For example, Uber passengers pay only 42 percent of the fare on average globally, and losses for the company amounted to US$3 billion last year.

But market share did wonders to company valuation. In 2011, Uber’s valuation was only US$60 million. By 2016, it went up to US$68 billion or 1,133 times more!

Uncontrolled monsters

However, unregulated fares are uncontrolled monsters. They surge during peak hours when demand far exceeds supply, and will grow worse after large numbers of taxis are driven out of business.

As such, Spad is issuing individual permits to taxi drivers exiting agreements with taxi companies, and granting them RM5,000 each to subsidise the down-payment of a new taxi. These benefits were first enjoyed by the initial 1,000 TEKS1M drivers.

There is little difference between drivers of private cars using Uber or Grab and taxi drivers. In fact, many Uber and Grab drivers are former taxi drivers, particularly those who could not qualify for individual taxi permits.

But the same driver can be a Jekyll and Hyde. Many people would steal or cheat if they think they can get away with it. There is no shortage of people at all levels who are corrupt, particularly those vested with powers or opportunities.

In the past, complaints against taxi drivers picking up passengers through trunk radios were minimal, as radio taxi operators were strict. With MyTeksi introducing its taxi app in 2012 and Uber with its ride-hailing app in 2014, participating drivers needed to be on their best behaviour or be kicked out.

As such, e-hailing app for booking taxis or private cars proved to be the real game changer, otherwise it would have been a slow and uphill task for Spad to transform the taxi industry.

Likewise, the bus industry can also be transformed using technology and bring changes to the way stage buses are being operated. Spad’s intervention is necessary for an industry-wide transformation as standalone effort by a single bus operator would not be pivotal.

Stage bus operations could be transformed by installing CCTV to record the behaviour of drivers and passengers, and payments to go fully cashless, as adopted by toll plazas.

Monitoring bus drivers would induce them to discard bad and dangerous habits, while bringing out their best behaviour. Similarly, the CCTV will make passengers more civilised and courteous, and reduce opportunities for pickpocketing and molestation.

Over the past decades, public and private stage bus companies were plagued by pilferages, leakages and wastages. If these are not plugged, they affect not only bus companies but also our society as a whole.

Daily, thousands of passengers witness stage bus drivers allegedly pocketing fares. When buses are government-owned, they see such open corruption as sanctioned by the authorities, negating the government’s efforts for an efficient and affordable bus service.

Credit must be given to Rapid Bus for investing RM35 million in a cashless bus ticketing system in 2011. However, the pilot project was suddenly rolled back and old cash machines quickly refitted when the new cashless machines, which have proven to be reliable elsewhere, mysteriously did not perform consistently in many local buses.

In the end, instead of tackling the menace of machine tampering, the management was swift in reverting to cash machines. Today, these buses are installed with machines that accept cash or card payments, and therein lies the problem.

Whenever many people board a bus, most passengers would just hand over the cash to the driver without waiting or being given a ticket, as they will be told to keep moving and not block others from boarding.

Pilferage amounts to millions

Such pilferage amounts to millions of ringgit in Greater Kuala Lumpur alone. By going cashless, public and private stage bus companies would cut losses or make more profits even if drivers are paid a minimum of RM5,000 monthly, which many truck drivers are getting.

Such respectable incomes would attract a new breed of professional drivers who would value their jobs and handle the buses with utmost care, reducing maintenance costs drastically.

When the government first ventured into operating buses, the leakages and wastages were shocking, as unscrupulous drivers collaborated with mechanics to create fraudulent repairs and sky-high bills.

Both federal and state governments should not have operated free buses. Recently, a state assemblyperson urged the Selangor government to stop foreign workers from getting free rides on Selangorku buses, as they were displacing Malaysians from enjoying the service.

The budget for providing free bus services could easily be reduced by more than half if funds were not spent on procuring, maintaining and operating buses. MyKads could easily be used to ride on any stage bus in Greater Kuala Lumpur, with agreed charges billed to the federal or state government.

If the amounts need to be capped, citizens who wish to enjoy subsidies can have their MyKads or prepaid buscards topped up at selected locations and intervals.

E-hailing has irreversibly moved our taxi industry forward. Likewise, going cashless would be the game changer for stage buses. Continuing with the status quo would forever condemn stage bus operations to a culture of pilferage that impacts our society adversely.

On the other hand, stage bus business would thrive when the entire ecosystem is healthy, with buses driven by professional, honest and fit drivers earning respectable salaries and valuing their jobs. All these could be achieved once pilferage of fares is totally eradicated.

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