Wednesday, December 07, 2011

Taxi fare hikes and what is wrong with the system.....

Commuters are up in arms over the recent taxi fare hikes[Cabbies hope for higher takings, commuters see red]. This fare hike is supported by the National Taxi Association (NTA) that represents six driver associations. We have an inflation rate of 5% and taxi drivers like all of the rest of the wage earners in this country have mouths to feed and feel the pinch as much as anyone else. I'm not against the intent to improve the income of taxi drivers but raising fares is not the only way to improve the lives and working conditions of our taxi drivers. .The system within which our taxi drivers make a living is a microcosm of much that makes life difficult for many hard working wage earners.


There was a time when taxi drivers could really work for themselves being able to own the taxis they drive and keep much of the income for themselves. When Comfort was "NTUC Comfort", it operate the taxi service closer to that of a coorperative. Today, it is know as ComfotDelgro a listed company that has to answer to shareholders for its bottom line. Taxi drivers today can no longer own their own taxis and have to rent their taxis from a for-profit companies. Because taxis and the taxi licenses are limited in number the cost of a taxi together with a licence is among the highest if not the highest in the world. Taxi companies form an oligopoly since they cannot expand market share easily due to  tight quotas on taxis and incenses. there is little incentive to set fares or rental competitively but merely follow the lead of ComfortDelgro. 


Despite high rentals, long hours and "tough" work of being a taxi driver, there is no shortage of takers for these jobs because of our serious structural unemployment problem. In the past, taxi drivers had low education levels but today it is not uncommon to see degree holders and ex-professionals such as engineers driving taxis. We even have one driver with a PhD from Stanford who started a blog and gave us a glimpse of the trials and tribulations of surviving as a taxi driver in Singapore [Link].
"Twenty years ago, I could make $80 a day, and you could buy a lot more with that amount of money in those days" - Taxi driver, Henry Tan, in today's Straits Times.

The rising cost for the taxi driver in the form of rental and fuel and means that real income has not gone anywhere in the past 20 years as the fares for passengers increased  over the same period. Much of the money goes to the profit of corporations (ComfortDelgro $228.5M profit in FY2010). govt revenue in the form of COE and licences. At the end of the day, much of what the passenger pays for goes to overheads and not the driver ....while we complain about taxi fares being too high, the taxi driver's life has not improved in the past 2 decades. What has happened to taxi drivers is a microcosm of what has happened in our economy as high costs push businesses to seek cheaper foreign labor to stay competitive and result in low or stagnant wages for Singaporeans.

I don't mind paying higher fares so that taxi drivers can live a better life but we know that the all past fare increases have been accompanied by rental and cost increases that take away the earnings of taxi drivers.

If you visit the National Museum, there is a video of a very young Lee Kuan Yew speaking to a large crowd at a rally in the 1960s. Half way through the speech, he pointed to a young boy in the audience and said "Look at this young boy, he needs an education ...otherwise he will grow up to be a taxi driver". Ironically, today we have highly educated taxi drivers forced to drive taxis due to structural unemployment as PMETs are pushed out of professional jobs by the large influx of foreigners.

There will be no progress for taxi drivers, workers and many Singaporeans unless the system changes significantly. Today, we have to compete with one hand tied behind our backs by the high cost of living and the high cost exacted by rent, overheads and the people and entities that contribute the least to our competitiveness.

80 comments:

Anonymous said...

1st..Yay!

Anonymous said...

Singapore unemployment rate is too low compared to other countries, resulting in too few taxis on the road. Demand for taxi services way exceeded supply. Either you increase the prices to reduce demand, or u increase the supply. Unfortunately, the supply side cannot be controlled, as many Singaporeans take taxi driving as a last resort. With unemployment rate so low, the supply of taxi drivers will remain low.

Anonymous said...

Another mechanism for the papist leegime to suck Singaporeans. In the old days the "pirate" taxis did a fantastic job. It was cheap and convenient. If the pap really cares for Singaporean's welfare they would have incorporated these "pirate" taxis into the transportation system.

Musicwhiz said...

Don't forget that property taxes were also just increased. Waiting for a triple whammy (so far it's two already).

Anonymous said...

salary staying the same or going down. But the cost of living going up and up. In the long term what will happen to me and my family, if all the government seems to do is kick the can down the road?

When are they going to do the work that they were employed to do?

When are we going to have an opportunity to live without fear and the anxiety of rising cost and diminishing cost of capital?

I am really worried. Maybe I too should go and plant oil palm in Honduras or Nicaragua. I am not young, but I have only one life. Yesterday, when I saw my son playing a RPGame, he told me. Daddy, you should go and plant palm oil, look there is a big advertisement!

I responded to it. And today, I am going down for an interview.

Anonymous said...

S'poreans are squeezed out of the property boom and high inflation. One way is to consider moving to Johor. There are safe gated communities, landed property or apartments at a fraction of S'pore's prices. Most will say Johor is unsafe or too far, but there's always a tradeoff in everything.

Buy Nusajaya - Horizon Hills, Leisure Farm, Bestari Heights, Nusa Idaman/Bestari/Duta etc. Don't wait till the rapid train service is up in 2018... by then prices may have escalated too high.

Anonymous said...

In order for the taxi drivers to earn more, perhapes ComfortDelgro should reduce its unnecessary overheads & reduce its taxi rentals. Stop finding excuses to fatten its wallet! We can see that the CEO & management are earning big bucks every year. Prosperity of the company is not shared with the taxi drivers who are treated more like a money machine.
The taxi drivers have to work for ComfortDelgro first (pay taxi rentals) before they could earn their first dollar. How much they have to toil on the road when the business isn't good that day?

Singaporeans can only compain but can't do anything. GST, COE, ERP, Bus/MRT fares hike were implemented/increased despite our protests.

We are expecting a global financial storm & life is expected to be tough. Why the fare hike now? is it because they know they can't do it in the next few years? Have the problems of our over-congested MRT & Buses solved? Can they take the extra load of people who decide to abandon the taxi services? Is the COE low enough for families with young children/handicaps/old folks to own a car now?

Tan Kok Tim said...

In Sydney, the transfer price of a taxi from one pte owner to another is in the hundreds of thousands of A$. It is a goalmine to own a taxi there. Should Singapore create goalmines for taxis to jack up taxi fares due to ownership prices going up?

Anonymous said...

"There will be no progress for taxi drivers, workers and many Singaporeans unless the system changes significantly."
Lucky Tan

So these people should be the majority, right?

Then how come 60% of this majority see system no need to change significantly by voting PAP?

Anonymous said...

Vote change in GE 2016.

Your children's future may depend on you voting your conscience.

Dr Vivian Balakrishnan:
How much do you want? Do you want three meals in a hawker centre, food court or restaurant?

In response to Dr Lily Neo.

Dr Lily Neo:
Sir, I want to check with the Minister again when he said on the strict criteria on the entitlement for PA recipients. May I ask him what is his definition of “subsistence living”? Am I correct to say that, out of $260 per month for PA recipients, $100 goes to rental, power supply and S&C and leaving them with only $5 a day to live on? Am I correct to say that any basic meal in any hawker centre is already $2.50 to $3.00 per meal? Therefore, is it too much to ask for just three meals a day as an entitlement for the PA recipients?

Lucky Tan said...

Tan Kok Tim,

That is a good point. But it is the same point as property. You sit on it and make a fortune without doing any work.

The control lies with ability of the govt to issue such licences. Also, whether these licenses should be made transferable or not.

It would not be good if people can squat on these licences and those who genuinely need a license have no choice but to pay an arm and a leg to be able to earn a living.

Anonymous said...

There is no financial storm.

Do not let the newspapers con you.

The only storm is the one that financial people will face.. lower pay and loss of employment.

You & I have nothing to do with it.
As for taxi drivers, resign from the associations.. they just collect membership fees and say yes to MPs.
They dare not say "no".

As for the rest of people here, all talk and no balls.

Anonymous said...

Unfortunate issn't it? What would Tony Tan have said and do since he was so "concerned" about Singaporeans welfare so-to-speak at his PE rally.

Anyway, under PAP leadership not a single thing went right and it seemed like a forever thing if 60% are not hammered hard enough to be enlightened. 6 months after the electon, Rochor residents, the dead in bukit brown cemetry, the much talk-about MRT fare, followed by electricity hike and now this take fare thingy. I hope all these can make into the most heart wrenching moving in the next election to remind 60% voters what they may get again if they don't open their eyes wide. More sufferings to come...I suspect this is not the end yet.

Anonymous said...

The system that we have here resembles a slave system whereby each taxi driver has to ensure that the rental charges (which includes the profits) of the taxi company are met first before they have anything left remaining to pay for diesel and wages for themselves.

The best part of it is that our Govt has vested interests in the whole public transport businesses as we all know for a fact that LTA, ComfortDelgro, SMRT, SBS, etc are all basically linked to our Govt.

So when our Govt is either directly or indirectly linked, whose interests do you think that they are protecting first ?

Merely saying that they are all deregulated is really BS especially when there is no real market competition in our public transport services.

Years back someone mentioned a frequent rumour that one of the biggest transport companies TIBS was majority owned by one Minister's wife. Just wondering whether there is any truth in the rumour to it as TIBS has since somehow morphed to become another one of our major public transport company ?

If there is some truth in that rumour, then could it one of the reasons why we ended in such a sorry state of public transport services where there seems to be no eagerness to rein in public fare increases ?

Amused said...

Perhaps it's time for a real Union to protect workers' interests.

Anonymous said...

"In the old days the "pirate" taxis did a fantastic job. It was cheap and convenient."
Anon 7/12/11 11:15

If the govt allows "pirate taxis" then they should also allow illegal hawkers what, right or not?

Or "pirate" bus operators also what.

Then they can allow illegal this and that.

Then how are those legal ones who pay huge rent and fees going to get business if there is illegal competition?

Anonymous said...

"The control lies with ability of the govt to issue such licences. Also, whether these licenses should be made transferable or not."
Lucky Tan 7/12/11 12:51

This is very easy for the govt to do and control what.

So why didn't the govt issue and control taxi licences to individuals and also made it not transferable?

If they do that, what will happen to Comfort delgro and other taxi companies?

Or what happen if those who have the non transferable taxi licence don't want to or didn't drive?

Get the point?

Anonymous said...

ComfortDelgro CEO & management are earning big bucks every year. The taxi drivers have to work for ComfortDelgro first (pay taxi rentals) before they could earn their first dollar. Prosperity of the company is not shared with the taxi drivers who are treated more like a money machine. This is how PAP governs Singapore too. Only the PAP elites reap the benefits of economic progress from the ordinary citizens who are also treated as money machines. The PAP have always put the interests of employer over worker.It is so sad we don't have independent trade unions in Singapore to improve the life and protect the interests of exploited ordinary Singaporean workers. The NTUC is just a PAP vehicle to spearhead the interest of PAP political party and also serves as place to reward PAP supporters with high paying jobs within the organisation. Singaporeans are not so easily duped by the wayang shows/speeches put up by our union leaders often reported by our 154the ranked ST.

Anonymous said...

Aiya, Sinkies deserve it what. Keep on voting PAP and scared their HDB become slums. Want to keep on pushing up your HDB price, you also need to pay top dollar for taxi, rice and MRT lah. And work longer too. No free lunch, understand?

Anonymous said...

"Singaporeans are not so easily duped by the wayang shows/speeches put up by our union leaders often reported by our 154the ranked ST."
Anon 7/12/11 14:19

So what if they are duped or not duped.

60% have made the choice. Do you have a better choice?

reservist_cpl said...

Increase supply? Reduce rent, duh.

Why is it that there is insufficient supply? Because Marginal Revenue meets Marginal Cost at less than optimal supply, an indication that the current taxi industry is NOT perfect competition.

Anonymous said...

To announce increase of taxi fare during this time is bad timing.As PM in his recent speech has sound out that the year ahead of us will be tough going,expects 20 per cent more workers to be retrenched.Now that X'mas & Chinese New Year are just round the corner s ,it is going to add burden to every housewhole in Singapore especially the wage earners.

Anonymous said...

i hv frens working as taxi driver their income is very gd n even encourage some of their frens to be a taxi driver.

Hum Yee Fan Sang said...

http://humyeefansang.blogspot.com/2011/12/singapore-taxi-is-more-fucked-up-than.html

Anonymous said...

This is an outrage.

Anonymous said...

"Don't forget that property taxes were also just increased. Waiting for a triple whammy (so far it's two already)."

MUsicwhiz, what do you mean?

Anonymous said...

PM LEE promised that he won't increase GST...yet. But he didn't say he won't increase your electricity bills, taxi fares and ERP charges.

How cunning indeed! More will come. It would do good to check how much National Debt does Singapore has?

Also, GST is still aimed to hit 10% and the Prime Minister is delaying it...for now. That means...GST will hit 10% after GE 2016.

Why is the government deluding the people of Singapore?

And why are the 60% so easily hoodwinked?

Singapore Man Of Leisure said...

1) I remember taking a taxi ride from Changi airport to my home 6 years ago and having a great conversation with the taxi uncle.

I was pleasantly surprised that this taxi driver, who was in his early 50s, knew so much about economics and investments.

At the end of the trip, I asked and he revealed he was the ex-MD of a Singapore company operating in Cambodia...

It got me thinking and reflecting. Will it happen to me one day too?


2) I do miss the privately owned yellow-top taxis. I am in the camp of "small government".

I would vote for private taxi licences to encourage self-reliance. It's better to be self-employed; and knowing that if we worked hard and smart, we can own our own "business".

Much like hawker licences give all of us the opportuntiy to run our own "show" - no matter what our education background.

Cheers!
Jared Seah

Anonymous said...

You should play more Monopoly and understand how things are being played out.

Even Warren Buffett invests in companies that are natural monopolies.

How are your basic needs of housing, education, transportation, utilities are being satisfied?

Anonymous said...

Why are Singaporeans unhappy with taxi fare hikes? Didn't we expect more fare (& other price) hikes after every election? Dudes, it's still a long way before 2016.

Anonymous said...

TT secures only 35.19% of votes shows that majority (2 out of 3) of Singaporeans are not happy with the ruling party.

The real issue is, why PAP still managed to obtain 60% of votes?

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Anonymous said...

60% of Singaporeans are so dumb. They got screwed day in day out and still not aware of the pain.

Anonymous said...

maybe singaporeans can cycle rather than complain. bicycle is cheap, no coe, no road tax, no erp, low maintenance and green. pls cycle infront of those diplomat cars especially lky so that they can enjoy their slow, selfish lifestyle. if all singaporeans cycle, the bus and taxi companies operated by gov will all go bust and eat themselves.

Anonymous said...

Let's set a target for the Opposition.

Get 51% of the total vote count in GE 2016.
Don't let the Party Against People claim they represent the majority of us.

PAP will definitely form the next government.
40% = 6 Opposition MPs.
80% = 12 Opposition MPs.

Anonymous said...

"...reported by our 154the ranked ST." They are paid big bucks to keep its ranking low. If the ranking goes up significantly, the big earners there will lose their sinecures.

"60% of Singaporeans are so dumb. They got screwed day in day out and still not aware of the pain." They prefer that to having their sisters, mothers and daughters be maids in Indonesia and Philippines. If HDB is unaffordable, they do not even mind stretching the repayment to 99 years because the big earners in our 154 ranked ST have sold them the idea that without PAP, their HDB pigeon holes are worth nothing and their womenfolks may have to be whores, just like those in ST.

Anonymous said...

Hey Mr Lucky

Rejoice!
Your.beloved Holy Cow has implemented BUYER stamp duty thats going to boost gahmen coffers further!

Not sure how it is going to help your lower class fans but ... Endorsed by Lucky cannot be wrong!

Anonymous said...

"Then how are those legal ones who pay huge rent and fees going to get business if there is illegal competition?"

quote"There's no way to rule innocent men. The only power government has is the power to crack down on criminals. When there aren't enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws."unquote

just replace the word 'criminals' with 'offenders' and you have the same thing - the compartmentalisation of what constitutes legal or illegal activity.

Anonymous said...

I very happy that taxi fares are going up!

It has been too cheap for too long.
I am sure business will be good for them.
Trying to flag down a taxi is not easy.. the drivers even wind down their windows and ask where you want to go!.. if its not to their liking, they wont take you!

I have never experienced this in all the major cities like HKG,NYC,TYO,SYD,LON,PAR.
This only happens here in Singapore

So, are we "world class" ? or are we comparing it to some other world?..

I hope they raise the fares higher after Chinese new year!

Anonymous said...

there is nothing wrong with the system...just another evil system that enrich the rich and rob the poor. the bankers, property developers and politicians are the worst cons of this era.

Anonymous said...

1) We should allow taxi drivers to buy their own cab but subject to monthly check and be regularised by a NON-PROFIT organisation. Why is there a need to rent the taxis at such premium rates? $100 per day = $3000 per month = $36000 per yr = $252000 in 7 yrs. This equivalent to the price of a BMW and are we riding on one?
2) If the aim is to increase the taxi driver's income, the company should reduce the rent and not push the burden to consumers by increasing the taxi fare.

Anonymous said...

60% of Singaporeans are so dumb. They got screwed day in day out and still not aware of the pain.

Its not 60% that are dumb, it is only 30% who are dumb. The remaining 30% is top 30% of income and net worth and it is in their interests to vote for party against people.

Anonymous said...

So these dumb 30% spoil the market.

If not, the opposition would have got 30 + 40 = 70% of the votes. But not necessary 70% MPs.

Like someone above said, even 80% votes may only get 12 opposition MPs if the GRC system is designed for this.

Anonymous said...

Government should take taxi license away from Can't_afford Del_groan.

Inflation triggers from rise in basic food costs and transport costs.

I hate taxi drivers.... said...

20,000 taxis on the road
Each have at least 1 driver
Assume 2 shifts = 2 drivers

That is 40,000 drivers

1% of these drivers are really F_Ked up people with terrible work attitudes, gamble at casinos and choose their customers and destination.

That is 400 drivers.

On any given shift, 50% of these are on the road.. that is 200 drivers.

I think I have met 10 of them already in my lifetime.

Its enough to put the remaining drivers in bad light.

Lazy
Indifferent
Crude
Unhygienic
Abrupt
Inconsiderate
Loutish

If you ever wanted to meet a very local, original Singaporean... the taxi driver is your prime example.

Enjoy it now.. before the foreigners are allowed to drive.
STB should promote them as:

"Your Singaporean- a taxing experience"

Ask yourself if you would ever tell your children to aspire to be a taxi driver in Singapore... its a career choice?

Anonymous said...

Let's be frank.

They increase taxi fares. If you can't pay it or disagree with it, don't take cabs.

Then the cabbies will get the message. But when you gripe and rant about it but still take taxis, then you're telling these taxi companies that you're OK with the hikes. Your action tells them so.

Action speaks louder than words. But you can't do that. Because you have been so used to such comfort, you became lazy and you do not want to struggle. So you rant and still take a cab?

That is why they get bolder. And they spring this on you.

It's simple. Don't take cabs. I'm not asking you to demonstrate, I'm just saying don't take taxis. Action speaks louder than words. Just by that simple action and change in your behaviour, you'll get the message across to these operators non-violently.

But are you going to do that? Self-discipline is a strength of character.

Anonymous said...

Yes, I have given up on taxis.

have not rode in one for about 5 years already.. and I dont own a car either!

Poor? no.

I earn 90K annualy.

I take the train, bus or ride my bicycle to buy groceries... dont even use plastic bags either!

Anonymous said...

"It's simple. Don't take cabs. I'm not asking you to demonstrate, I'm just saying don't take taxis. Action speaks louder than words. Just by that simple action and change in your behaviour, you'll get the message across to these operators non-violently."

hey, if big taxi companies can come together & have a concerted effort to increase fare (weren't they asked to adjust their fares and assuming if they do), why can't all consumers be orgaianised to come or band together to demonstrate as a form of protest - the message will be more loud and clear and impact felt greatly. rather than one person doing non-violently and who the hell will know about it (should i say your solo message).

if BIG companies must come together to show solidarity for any price increase of all companies (rather than one company doing it alone) to have effect, do you think a one person's solo non-violent act will have any effect.

Anonymous said...

Hike, hike lah, wrong, wrong lah.

2016 is still far away what. By then everything will be forgotten.

Can always count on GRCs and 60%. If 2011 can, 2016 also can lah.

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Anonymous said...

"hey, if big taxi companies can come together & have a concerted effort to increase fare (weren't they asked to adjust their fares and assuming if they do), why can't all consumers be orgaianised to come or band together to demonstrate as a form of protest - the message will be more loud and clear and impact felt greatly. rather than one person doing non-violently and who the hell will know about it (should i say your solo message). "

It's a message meant for the individual and not the masses. When the individual does it, he'll see the impact of it.

You are just being stupid here. Taxis is not a need. You don't have to fight for the sake of fighting. Conquer yourself first before you implore others to do so.

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Xianlong said...

Local cabbies are squeezed dry. Took a cab back from Kluang back to sg as i don't think i can cycle back the next day. Cab driver switched to his private car to put both our bikes. Driving taxi can still have private car for a normal cabbie in Msia. Higher standard of living than local drivers.

Anonymous said...

http://popa-modelling.blogspot.com/2011/12/taxi-current-versus-revised-fare.html

Assuming the commuter take up rate on taxi does not reduce after the fare hike, cabby will be seeing a potential earning increase of over 18% basing on the revised fare structure.

Have tabulated an hourly fare change rate on blog for reference, base on revised fare structure.

Anonymous said...

What's wrong with the system is that it's a government monopoly. I challenge the government to allow individual to own their own taxis and set their own rates. I bet the driver will earn more and more passengers will us their taxis. As for call bookings, with SMS and mobiles they do not need a fancy call booking system and you get personalised service. Even with the $60 COE, I will buy my own taxi and am very darn sure I can make get better wages than the slave drivers now. If the Transport Minister has balls he will take up this challenge

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system should increase the supply.

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Pearson Airport Taxi said...

the system should need to be get change and updated

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David Adam said...

Hikes are general but it's the system who should take care of it's staff. So, the staff stay cool and effective with their job.

Regards,
David Adam
Airport Taxi

IT Consultants said...

i agree with David, they should do this for their staff

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Luton Airport said...

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