In taxi saga, consumers pay and pay

Thursday • December 13, 2007
Liang Dingzi

THE taxi saga, which stars taxi drivers, their customers, the Land Transport Authority (LTA) and taxi companies, continues to play on. The Taxi Operators' Association (TOA) is the special guest star in this never-ending drama.

The story begins with consumers complaining about taxi drivers' errant behaviour, such as overcharging customers, refusing to pick up customers, touting and failing to turn up for scheduled bookings.

Customers attribute the shortage of taxis in Singapore to such unsavoury behaviour. The LTA has been asked to solve the problem.

But the authority claimed that because the industry has been deregulated, the onus is on the taxi companies to make things work. This tactic backfired on the LTA when consumers started questioning its role as a regu- lator.

Consumers have offered many suggestions, such as raising metered fares, rather than having complicated, multi-layered surcharges.

After some heated debate, the LTA finally stepped in to introduce harsher penalties for errant drivers. While there was temporary relief, many people doubted whether the punishments would nip the problem in the bud.

Many members of the public also sympathised with the drivers' struggle to cope with increasing operating costs, largely due to higher fuel prices and Electronic Road Pricing charges. Some suggested that taxi companies should help their drivers by lowering rental fees.

Instead, ComfortDelGro raised fares by 10 to 49 per cent. This fare hike includes higher flag-down rates, higher city area surcharge and a peak-period premium.

The customers seem to be the biggest losers in this saga, having to fork out more money to solve a problem they did not create. Younger people can choose to take the bus or the MRT, but what about seniors or disabled people?

Will higher fares also mean higher rentals sometime in the near future?

Taxi companies have shown that they will not hurt their profit margins by lowering rentals to help their drivers.

In addition, higher fares do not guarantee that more taxis will be available. Even ComfortDelGro has acknowledged that the fare hike could result in a dearth of taxis in the outskirts. So long as there is a shortage of available taxis, drivers can continue to choose their routes and charge higher fares.

Even though there are several taxi companies, the business is far from being competitive. Smart Taxis was quick to copy ComfortDelGro in raising its fares and other operators will likely follow suit.

It would take a bold company to be different. Companies can make a world of difference by finding ways to improve reliability and customer service without laying the burden on the consumer or the taxi driver.

Perhaps the LTA did the right thing when it initially assumed a supporting role in the saga. Its involvement has sheltered the taxi companies from the fracas, as they wait quietly for the right moment to move in.

Unfortunately, the consumers can do little to influence the saga's ending.

The writer is a management consultant with more than 25 years of experience in customer service.

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