LETTER | It was reported that the Transport Ministry is working with Finance Ministry to assist drivers to obtain loans for new taxis.
Like all Malaysians in the bottom 40 percent (B40) income group, taxi drivers deserve help. But it will be counterproductive if such assistance lures more drivers into a low-income trap.
While it is good to make the lives of the B40 more comfortable, it is better to show them how to earn a higher income. It is necessary to look at past failures to determine the help taxi drivers really need.
In 2011, the Land Public Transport Commission (Spad) became operational and decided from the onset not to issue new taxi permits, as the market was flooded with taxis, with too many drivers chasing too few passengers.
Earlier, the Commercial Vehicle Licensing Board (CVLB) had issued too many permits to both taxi companies and drivers. In 2009, taxi fares were raised, and many newcomers paid several thousand ringgit each as a deposit for taking delivery of a new cab from taxi companies.
They signed rental-purchase agreements but did not understand the contract and commitment. A simple method of calculating monthly instalments based on daily rates further add to the confusion.
Rental-purchase is similar to hire-purchase loans, with the rental of taxi permits, cost of third-party motor insurance and miscellaneous costs demanded as ‘benefits’ by drivers embedded.
Interest charges for rental-purchase are much higher than hire-purchase from banks, in commensuration with the risks, such as no insurance cover for damage or loss of the taxi, drivers late or defaulting instalments, committing licensing offences which taxi companies are jointly liable, or surrendering the taxis and walking away.
Unlike banks that many take loan defaulters to court and make them bankrupt, taxi companies use their resources to find other drivers willing to take over the used taxi at lower charges.
In April 2013, Spad introduced Teksi 1Malaysia (Teks1M) featuring the Proton Exora, and later 1,000 Teks1M permits were distributed to individual drivers with 697 in the Klang Valley, 251 in Johor and 52 in Penang.
The total number of taxi permits were not increased as the 1,000 Teks1M permits were converted from those surrendered by taxi companies, which had many unutilised permits and taxis.
Taxi drivers and companies suffered more when Uber was introduced here in 2014 and MyTeksi app users swiftly switched to Uber, which offered a starting fare of RM1.50, RM0.55/km and RM12/hour, when budget taxis were RM3, RM0.87/km and RM17.14/hour.
MyTeksi morphed into Grab and took Uber by the horns and offered similar or better benefits for both passengers and drivers, culminating in Uber exiting from the Southeast Asian operations in March this year.
The winners in the four-year tussle between Uber and Grab were passengers and drivers. The losers were taxi drivers with too few paid trips and taxi companies with too many idled taxis mothballed in their yards.
In 2016, Spad unveiled the Taxi Industry Transformation Programme (TITP) with 11 measures, which included granting of individual permits to drivers exiting rental-purchase agreements, plus a RM5,000 cash grant each to help them purchase a new vehicle.
In the past, many taxi drivers with own permits did not qualify for hire-purchase loans and turned to taxi companies for financing. These rental-purchase agreements did not include cost of permit rental, at around RM20 per day.
With more individual taxi permits issued today, many successful applicants are unable to obtain hire-purchase loans to buy the vehicles and have appealed to Transport Minister Anthony Loke for help.
But granting more individual taxi permits and helping drivers to buy new vehicles could be sentencing them to years of misery, that also affect their families and passengers at the receiving end.
It would be better for the Land Public Transport Agency (APAD) to conduct briefings on the estimated total monthly fares and costs of operating a taxi for those applying for taxi permits or hire-purchase loans, or before signing rental-purchase agreements with taxi companies.
A comparison should also be made with operating private vehicles using e-hailing apps, numbering about 10. Some of them are Dacsee, Jom Ride, Mula, MyCar, DIFF and Riding Pink, apart from Grab.
With many e-hailing apps using private vehicles competing fiercely with each other, taxi drivers will not stand a chance as their regulated fares are higher and street-hailing for taxis continue to decline.
A large number of taxi drivers have already switched to e-hailing using private cars and only a stubborn few and those who are unable to operate such apps remain. Alarmingly, newcomers are acting like fools, rushing in where angels fear to tread.
The stubborn few still think the world owes them a living and the public must use only taxis. They lie in wait for passengers to show up and dictate terms with a “take it or leave it” attitude, preying on everyone including tourists and giving our country a bad name.
The briefing for existing taxi drivers and wannabes should include opportunities to drive buses and lorries, which provide a stable job and much higher income for those prepared to work as an employee, and not whenever they like.
There is an acute shortage of heavy commercial vehicle drivers and taxi drivers that switch to driving trailers could easily join the middle 40% (B40) income group overnight, earning between RM5,000 and RM8,000 per month, far more than fresh graduates.
The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.