Malaysiakini Letter

Driving taxis in the New Economy

YS Chan  |  Published:  |  Modified:

The livelihood of taxi drivers around the world had been severely impacted ever since Uber started to match demands from passengers with drivers supplying ride services using private vehicles.

In 2010, London black cab drivers earned between RM42,000 and RM56,000 a month, more than many in licensed professions such as accountants, doctors, engineers and lawyers.

In 2013, some New York taxi medallions (permits) were sold for US$1.3 million but not long ago, one was transacted for only US$241,000.

In Sydney, a taxi licence was worth A$406,000 in October 2012 but dropped to A$200,000 in February this year.

Cabbies in Malaysia are spared from such huge losses as they do not have to pay for taxi permits based on market rates.

Since inception, all metered taxi permits issued by the Land Public Transport Commission (Spad) were granted only to individuals, starting with the first 1,000 under Teksi 1Malaysia (TEKS1M).

Last August, Spad unveiled the Taxi Industry Transformation Programme (TITP) and qualified cabbies exiting from the ‘pajak’ model were granted individual taxi permits and RM5,000 each to pay for downpayment of a new taxi.

A large pool of metered taxis is necessary to ensure fares remain stable and not allow ride-hailing apps such as Uber and Grab to dictate terms.

If taxis are driven out of the market, peak demands and surge pricing will be the norm and no longer restricted to rush hours.

But how do taxi drivers compete in the New Economy? The short answer is to be flexible and not insist that all their passengers must pay no less than regulated fares.

There is no reason why they cannot agree to the same fares and incentives acceptable by private car drivers, more so when taxis run on much cheaper natural gas for vehicles (NGV).

Should they do so, Uber and Grab could lump taxis together with private cars, and this would allow them to have equal opportunity to receive just as many bookings through e-hailing.

Passengers are unlikely to decline if they see a taxi coming to pick them, as many have had their fair share of clumsy part-time private car drivers unable to locate them.

Added option

Cabbies have the added option of picking up street-hailing passengers and get to collect higher regulated fares when using the taxi meter.

And if they treat every passenger as a VIP, a taxi driver could easily add 20 to 30 passengers a month to their regular pool of customers. After all, they could easily clock 20 to 30 trips a day from both street and e-hailing.

A large pool of regular customers would ensure they get many bookings to the airport, provided their driving skill inspires confidence and taxis are well-maintained.

Therefore, taxi driving can be rewarding for those who put in the required effort, and drivers conduct themselves professionally.

Those who could communicate well with foreigners can act as tourist drivers and earn much more from hourly bookings, shopping commissions and tipping.

On the other hand, those who stick to the old ways by only waiting at train stations and shopping malls will earn much less.

Those who refused to use the meter and continue to fleece tourists or commuters would eventually be hauled up, and their taxis impounded.

The cardinal rule for all service providers also apply to taxi drivers, and that is never be rude or angry, even when customers are wrong.

Those who cannot do that have no place in the service industry and should not drive public service vehicles such as buses and taxis.

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