Revamp taxi-fare structure - charges should be based on time spent using the cab

Nov 22, 2007

I CANNOT agree more with your editorial, 'High fares the taxi solution' (ST, Nov 17), that LTA's toughening of the penalties is only treating the symptoms and not the root of the problem, that is, the incorrect pricing of the service.

However, I am of the opinion that to increase the flagdown fare to $7 to $10 would spell the death of the taxi trade and put some 30,000 families who are fed on taxi income in Singapore in financial difficulties. This is because given the high cost of operating a taxi (rental at $100+/day and fuel at $3/hour) in Singapore, taxi drivers depend on a very high volume of business and long hours of driving to make a profit, and the business volume comes mainly from shopping centres and MRT stations with the type of passengers who would not be prepared to pay anything more than a few dollars per trip. The only time when demand outstrips supply is from 9pm to 11pm from Monday to Friday and Sunday (Saturday is not a problem. On Fridays the super-peak hours may stretch to midnight) and only in town areas, during which I estimate that passengers would be willing to pay up to $4 for the flagdown fare and not more. At all other times, the supply is probably 10 times more than the demand, as evident from the long taxi queues at taxi stands and shopping centres, both in town and in the housing estates alike. I estimate that a very experienced taxi driver would be able to keep his taxi occupied 50% of the time at the current pricing level, including that of the super-peak hours mentioned (because the driver has to make a vacant trip back to town after taking the previous passengers back to the housing estates where most of the locals live). A drastic increase in the fare could bring the occupancy rate down to perhaps 10% or less all day except for the two or three hours mentioned. We would then see many taxi drivers leaving the trade, and when the supply and demand reach an equilibrium, there may only be less than 1/3 of the present 23,000 taxies left in Singapore.

While I agree that your article had predicted these outcomes, their social impact cannot be ignored. Taxi companies' earnings would shrink corresponding to the smaller taxi population. Some may even face a survival problem. Taxi driving would become a tougher and more frustrating job and, as a result. some drivers may resort to cheating tourists to make ends meet. For the passengers, there would be no more cheap taxi rides home from shopping centres and MRT stations. Taxi driving would cease to be a buffer job in bad times or a source of second income for many.

I would like to suggest an alternative, that is, restructuring the fare system to be based on time spent only, with a minimum charge of $5 island-wide and $20 for departure from the airport as well as a CBD surcharge of $2 when ERP is in operation and during the super-peak time mentioned to compensate the drivers for his ERP payment and his vacant trips back to town respectively. If the time-based fare is pegged at $0.50/min the drivers would be able to make a few dollars an hour after deducting his cost if he is able to keep his taxi occupied half of that one hour. And for the passenger, a 10-minute (or less) ride would cost him or her only $5, and a 15-minute ride, $7.50. The morning peak hours surcharge should still remain to compensate the drivers for taking fares to town as he would almost without exception have to return to housing estates without a passenger thereafter.

The basis of my suggestion is that, with the current fare structure, disputes between drivers and passengers are always directly or indirectly related to time spent on a job, thereby causing the 'misconduct' on the part of the drivers and as a result unhappy passengers. See the following examples,

1. Passengers going from town to Hougang, Sengkang, Ponggol or Serangoon North insist on using Serangoon/Upper Serangoon Road which is the most dreaded by taxi drivers because of the countless number of traffic lights and slow traffic, instead of the highway even when the drivers assure them that there is no traffic jam on the highway. What this means for the driver is: Make the least money in the longest possible time, and probably also miss out the peak hours as a result of the delay. The possible result: Refusal of the job.

2. Passengers going to two, three or even four places during super-peak time, with all places within the same or the next neighbouring housing estate, and all having the requirement to enter carparks and drop the passengers at the lift lobbies (it is not uncommon to hear passengers themselves saying that by so doing, taking a taxi is cheaper, and better than taking a bus, as buses do not send them to their lift lobbies). What this means for the driver and the possible result are the same as what has been illustrated above.

3. Passengers demand that the drivers wait for them during a trip for ridiculous reasons such as 'doing banking business', 'taking a bath and changing clothes', 'to buy food or a cup of coffee', 'getting the boss to sign a cheque in the office', etc. The result: Argument, and rude drivers, since it is already too late for the drivers to refuse the job.

4. Passengers going from the airport to Simei or the nearby estates, at the fare of $10 including the surcharge, with the driver making a loss for that trip if he had spent two hours queuing at the airport and making the trip (I am not saying that the passengers were wrong but the fare structure is flawed). The result: 'Black-face' and unhelpful or even rude drivers.

5. Passengers book a cab but do not show up and do not cancel the bookings, with some even switching off their cellphones, or not answering phone calls. At least 20 minutes of the drivers' time would be wasted in such cases, taking into account the reporting time, time waiting for the passengers and time getting the approval to cancel the bookings from the system.

6. Passengers taking too long to board taxies either because he or she is still waiting for someone, or taking too long to load his/her things even with the help of the drivers (some, especially foreign workers, use taxies to move house), or had made a booking but keep the drivers waiting too long for one reason or another. Under the current rules, drivers are not allowed to turn on the meter until the the taxies start moving.

The time-based fare structure would be able to provide answers to the first five conditions since the drivers' income would no longer be determined by the routes chosen by the passengers and how slow the journey is. To fine-tune it further, a surcharge of $2 per additional stop could be levied for the second and third conditions above.

The system would also bring one additional advantage: No taxi driver would break the speed limits now as this would hurt their income. A driver who speeds at 120kmh to reach Woodlands from Suntec in 20 minutes would earn only $10 but if he ritually follows the speed limit to complete the job in 40 minutes, he would earn $20.

As for no-show booking jobs, I would like to suggest that taxi companies reimburse the drivers the booking fees and thereafter pursue payment from the passengers who made the bookings. Taxi companies, with their vast resources, should have no problem doing this job. Passengers who default on bookings would keep defaulting if they know that no action would be taken by the taxi companies but would surely think twice otherwise.

To tackle condition No. 6 above, I would like to suggest that the drivers be allowed to turn on the meter once the passengers place any item in the taxis or had asked the taxis to wait for someone else. This is not unfair as, under such conditions, the taxis are in effect already hired to the passengers concerned and can no longer accept other passengers or bookings. As for passengers keeping the drivers waiting too long on booking jobs, the meter should be tuned to be able to automatically levy the charges for the extra waiting time when the passengers finally board the taxis.

Lastly, I would like to say that happy drivers would mean good service. It is very easy to make the drivers happy: Just by understanding their problems and adequately compensating them for their effort (their problem is also very simple: time is money).

Chiam Tat Liang