Taxi fares
December 26th, 2007Last Saturday, I was invited on the panel of the Channel U talk show “Shoot 3″ to discuss the recent hike in taxi fares. The same topic was also raised during my bimonthly chat session with residents that same afternoon.
A taxi driver on the panel lamented that disesel prices have gone up significantly and their income has dwindled. The increase in flag-down fare and per unit distance/waiting time charges is hence meant to increase the takings of taxi drivers in order to meet their higher operating costs. While some passengers may stop taking cabs in the initial period, the income of drivers is likely to be higher at steady state so that their livelihood is not at stake.
As for the peak hour surcharge change, it is meant to address the problem faced by passengers who find it difficult to get a cab during peak hours when demand far exceeds supply. Hopefully, this will encourage people who do not really need to travel by cab and those who do not wish to pay the extra dollars to turn to alternative transport.
The contention is whether the two issues need to be tackled at the same time as this is double whammy to the rising costs of living we are experiencing now.
To me, the first issue should be looked into now. There are many people working as taxi drivers, and if their livelihood is drastically affected, it will lead to other problems. It is the duty of the taxi company to look after the interests of the drivers. I think in general, we can assume that regular taxi passengers are better off than taxi drivers in terms of financial resources, and taxi should be the most expensive form of public transport.
So could the taxi company choose to delay the peak hour surcharge change to say, six months later? This might lead to other complaints that there are too many fare hikes in such a short period.
I have two questions:
Will the taxi company increase the taxi rentals? I hope not as this will negate the extra income that drivers are getting to pay for the diesel. The corporation will hence be accused of pocketing profits at the expense of drivers and passengers.
If the diesel prices come down in future, will the fares be adjusted downwards accordingly?
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December 26th, 2007 at 5:11 pm
i wish there is more depth in the writings on this blog.
why repeat what everybody else knows and have been hearing and reading the past weeks?
we’re not stupid, we can read, and we can understand english
many times, the only occasion of depth are the postings of all your individual speeches in parliament, and that’s only as far as length goes
most of the stuff expressed on this blog is so shallow i’m quite embarrassed to know it’s representative work of our future government
Yam Keng: Hi AO, thank you for your feedback. Certainly I am not an expert in public transport, or for that matter, the taxi industry, to offer any in-depth analysis or suggestions. I form my opinions from what I read, see and observe. By posting this blog, I hope to interest some readers to add their views to the discussion so that we can all understand this topic better.
December 27th, 2007 at 12:22 pm
When oil prices increase, taxi companies increase the charges to offset the cost but when oil prices fall back to normal levels, would taxi companies reduce the charges to reflect the changes in a similar manner? I have not recalled any such instance.
If the real reason for the hike is due to the rising cost of diesel fuel, and the increase in fuel cost is perceived to be temporary, could the taxi company consider some temporary surcharge, such as a flat one dollar for any fare less than ten dollars and two dollars for fare above ten dollars? When the oil prices fall back to normal levels, it would be easier for the taxi companies to remove the surcharge. This would be similar to airlines which do not wire the temporary increase in cost due to fuel into the air ticket.
Yam Keng: Yes, Tang. I think that is a great idea.
December 29th, 2007 at 1:12 am
Quote
“If the diesel prices come down in future, will the fares be adjusted downwards accordingly?”
Unquote
I’m glad that you pondered about this question, Mr Baey. May I propose that we also pose this question to all the hikes that took place and are going to happen. In times of good economic conditions, inflation takes place and prices go up. However, in times of economic recession and hard times, should the prices come down correspondingly? If I am not wrong, it has never happened before; the inflated prices stayed. Hence, shouldn’t the same principle apply?
Yam Keng: Yes, Keith, I certainly agree. If prices are tied to a parameter, they should fluctuate both ways when the parameter changes. For example, electricity prices and ERP charges (for some gantries) have come down before when oil prices and traffic volume decreased. Unfortunately, I don’t think it is such a simple straight forward formula during price determination. Usually many other factors are at play. I sincerely hope these companies and authorities have the integrity to be responsible to charge fairly and reasonably. Hence, we have bodies like the Public Transport Council to assess and approve any public transport fare revisions.
However, I don’t really agree with your point that in times of economic recession and hard times, prices should come down correspondingly. For example, an economic crisis could also be caused by crude oil shortage and soaring oil prices, should the taxi company cut taxi fares and make it difficult for taxi drivers to make a decent living? During such times, the government can of course play a part to help those who have fallen into hard times.
December 29th, 2007 at 2:24 am
I really hope the taxi companies will adjust the fare downwards as and when the oil prices decreases. However, comparing such increases in the past with this increase, chances of any downward adjustment of taxi fares does not look good. And since buses also need diesel to run, the questions now would be:-
1. when will the bus companies increase their bus fare?
2. when will the taxi companies increase their rental of taxi fees too?
SP Services will be increasing their fees from Jan 2008 onward, will the one-off utilities rebate in Jan 08 by the govt be enough to help the needy….and perhaps even the middle income?
December 29th, 2007 at 7:58 am
I have an excellent idea to help alleviate this problem.
Why don’t the MPs donate their excess income to help offset some of the problems? Surely you don’t need excess of a million dollars a year to survive. By donating the excess income, MPs can:
1) Secure votes for the next election by showing that they genuinely care for the electorate and that they words are not just lip-service;
2) Help prevent social problems that are caused by taxi drivers that are desperate for more income.
We can also ask high-income earners in the private sector to donate too. But MPs need to lead by example.
Also, another way is to source for foreign talents that can be MPs. There are indeed a lot of extremely intelligent and capable people in countries like the United States who wish to run in Singapore due to the high pay (American statesmen even said that they are “shocked” by the Singapore ministers’ pay during the last round of increases). These foreigners are just as capable, or if not more capable than the incumbents. I’m sure they won’t mind taking up honourary citizenship in order to run. By attracting foreign talent, we can lower the overall cost of hiring MPs and divert the funds to people who are really in need.
Yam Keng: Certainly, those who are able should help those who less fortunate, and that should include MPs. PM himself has devoted his increments to charity and he also made a point that he doesn’t want MPs to follow suit by making public display of their philantrophy. To my knowledge, most MPs do donate to their constituency welfare funds and other causes that they support. Whether this needs to be made public knowledge should be left to the individual.
I do not want to go into the discussion on the pay of Ministers and MPs but just want to make a quick comment on getting foreign talent as MPs. We do have politicians who are not born in Singapore, eg Minister Khaw Boon Wan, but they have lived many years in Singapore and have become Singapore citizens. I believe most, if not all countries, would have a requirement that only their citizens can run for elections (even Arnie was already a US citizen before he could run to be a mayor). To be a good MP, I think we need to be well exposed to all segments of the Singapore society so that we are able to form well-rounded opinions and make differences to improve the lives of Singaporeans. Even as a Singaporean myself, I still need to learn more beyond my own circle of life. I would doubt very much, the ability of an imported foreign talent who has not grown up and lived in Singapore, and familar with the Singapore system, to understand the concerns of Singaporeans well.
December 29th, 2007 at 3:56 pm
I think all past and present transport ministers should step down for failing to solve the taxi problem that has festered for more than 10 years. They want to earn top dollar, so they must be accountable like any private sector executive!!
Yam Keng: There must be accountability for what and how we pay public servants, but I don’t think our taxi problem is that bad. It just constantly needs fine-tuning faced on changing conditions. I was in KL recently and learned that most taxi-drivers there do not go by the meter. According to one I spoke to, he says he used to earn about RM100 plus a day after paying rental and diesel if he goes by the meter, but now he can easily earn RM200-300 a day. And they do not have the practice of two drivers sharing the same vehicle. On the other hand, I believe taxi drivers in Singapore earn a net daily income of about $100 on the average. If we assume the purchasing power of RM1 in KL is the same as S$1 in Singapore, then our taxi drivers are getting significantly less than their counterparts in KL. But we do not have to live with price haggling and can travel with the ease that we just pay according to the meter price. I think in this respect, our authorities should be given some credit.
December 29th, 2007 at 3:57 pm
If HK, Taipei and even Beijing can have such excellent taxi service, I fail to see why S’pore can’t. Don’t even try to compare taxi fares with HK because HK’s salary levels are at least 30% higher than in S’pore.
December 29th, 2007 at 7:15 pm
Dear MP Yam Keng;
I am baffled by one of your question on whether the taxi companies will increase the rental charges after the fare adjustments upward and You seemed to answer yourself with the wish that it would not.
It is widely believed that one of the best solution to help cabbies to have slightly better incomes was to lower the rentals and adjustments to ERP charges and diesel tax as taxis are ‘public transports’.
Your question seems to indicate that further increase(s) in taxi rentals may still be justified although You wish it may not happen. Have I misinterpret your thinking Sir? I apologize sincerely if I have.
Yam Keng: I am just reflecting the wishes of taxi drivers as it seems like taxi companies tend to increase rentals after they raise the taxi fares. Although I would think they increase rentals because the operational costs of the companies have also gone up. I hope that whatever additional income taxi drivers manage to earn to pay for the higher diesel costs, does not all end up with the taxi companies.
December 31st, 2007 at 12:06 am
We cannot expect taxi fares to remain the same when standards of living have gone up and when the income of the average Singaporean or foreigner has increased. All thanks to the blooming economy….
I once took a cab from Kallang MRT station to a client place at Kallang Bahru. Guess what the cab driver told me? He said that he wouldn’t encourage me to take a cab if I am travelling to a more distant destination like Boon Lay as I have a much better alternative which is the MRT. I was amused by his concern and didn’t bother to stop him from rattling on. He commented that the taxi fare hike is to encourage people to take public transport instead of flagging for a cab when they do not really need it. I took a closer look at him and reckoned that he should either be a retiree or he doesn’t need his income to support his family. He further added that he is a regular at Changi Airport…now I know why he doesn’t really need my business afterall..hahahaha….Anyway issue aside, I told him that I can claim the taxi fare…
However, I totally agree with him. If you take a step back and think, how many occasions have you taken a cab which you really need it? Most of the time is for convenience right? I do have a few friends who are so used to taking cabs to ferry them to work and other venues that I once jokingly teased them that with their monthly income, they can well afford a car. A friend immediately defended herself by whining how expensive it is to maintain a car with the annual road tax, monthly season parking, petrol as well as insurance etc…she has done her calculations well and concluded that it is still much more cheaper to just flag for a cab….wahahaha…
She is absolutely right.
I myself am guilty of that. There were a few times when I conveniently took cab from Jurong point when I could have taken a bus back home in less than 10 minutes excluding waiting time. However with the cab fare hike now, I told myself I can’t be so pampered again. But if I were to be doing my groceries alone, I wouldnt of course torture myself….hahaha…
I guess it all boils down to the reason why we flag for a cab in the first place….if the passenger has a genuine need for a cab, I guess the hike in the cab fare would have little impact on her. But if for a passenger who is so pampered and needs to be ferried around, she might feel the squeeze and cut down on her cab rides…
January 1st, 2008 at 11:49 pm
Yam Keng,
1) It never fails to amuse me why ministers and MPs love to compare S’pore’s taxi problems with those of DEVELOPING countries. In reality, S’pore is a developed country, so please compare apple to apple. We might as well compare to taxis in Ethiopia and give ourselves a false sense of achievement!
2) The PM did not say “he doesn’t want MPs to follow suit”. What he said was he does not EXPECT MPs and ministers to follow suit. Frankly, many like are absolutely unconvinced of the need to pay our ministers and MP such high salaries. Even if MPs and ministers donate their salary (which I doubt many actually do in any meaningful way), they would benefit from double tax deduction to the remainder of their income. With such high “allowance”, MPs will sorely lack the moral authority to lead and to solve ordinary S’poreans’ financial woes. That’s because MPs are leading such luxurious life that they can no longer connect with the people.
January 2nd, 2008 at 12:12 am
With regd to ministerial salaries I think we hv to c things in the right perspective, why shld a banker like tony tan sacrfice a million dollars career @ OCBC and came in to draw a third of his former salary, ask anyone would he do it, if nt why shld Dr Tan do so and yes indeed he had done so when approached by the PAP in the late 70s but can we assume tht the nxt tony tan will come in for cheap, if yes how many, I doubt there will be many. Yes a million dollars maybe an astronomical fig to most sporeans but we r running a country nt masak masak and if spore falls into wrong hands eg james gomez (liar) and chee (political gangster) all will be gone.
January 2nd, 2008 at 11:17 am
easternwind,
How do you know tony tan earns $1m/year at OCBC back in the 1970s??? The crux of the matter is our ministers draw the HIGHEST salary compared to any minister on this planet!! So, it is not just ordinary S’poreans who think their salary is an astronomical figure.
Don’t forget the taxpayers funded pension that ministers and other senior civil servants enjoy (which can be up to $179,000/years from age 55 till death).
Of course we must pay ministers decent salaries, but do we want ministers who join purely for personal financial gains?? If our ministers demand top private sector salaries, then why can’t our NS boys’ pay be benchmarked to private sector pay as well. I’m sure there are many many talented S’pore boys serving NS at any point in time.
Ministers gain a lot from holding public office, their family members enjoy political connections that is essential for businesses. How do you impute such benefits in kind? The substantial benefits of political connections is a key reason why every country on this planet (except S’pore) see no need to pay their ministers sky-high salary.
What’s wrong with having james gomez in govt. Is it becos of all the propaganda you have heard from the local press about him??
January 2nd, 2008 at 7:04 pm
Dear MP Baey;
Can I ask for your opinion on the Issue(taxi fare adjustments) in your position as a Member of Parliament or from the angle of a non taxi drivers’ position, maybe that of a commuter or just any layman.
Please do oblige, thank You sir!
Yam Keng:A commuter would definitely want prices to be as low as possible and hence naturally would not welcome any fare increase. But I have to recognise that a taxi does bring about the convenience, speed, comfort and exclusivity that other modes of public transport (bus, MRT) cannot provide. So I would expect to pay different prices for different levels of travel quality. If the fare increase, in particular during peak hours, would make it much easier for me to get a cab during that period, I should be be happy to pay the extra. Otherwise, I will choose cheaper options and take the bus or MRT.
January 2nd, 2008 at 8:29 pm
Tony Tan is just answering to his PAPA’s call….Can he decline the offer? Of course not….He won’t becos it’s better a minister with all the perks than to be a nobody in a local bank…..
January 3rd, 2008 at 3:32 pm
Geez Easternwind, can’t you see? Because it’s all planned out that they will be getting more as a politician than when they are as a banker in the long term.
Sheesh. The brutal truth is that there ARE some good politicians in it for the country and citizens sake. But for a politician to be the highest paid in the world of a country with a GDP so much less than US, Australia, even Spain, I am left speechless.
Anyway, this is about taxi fares, not salaries of politicians. So let’s move on.
Again the brutal truth? The taxi fares increase is for the stake holders. Bottom-line dollar and profits are always the focal points. And I am certain taxis are no longer part of the public transport category. None of the websites (PTC, Comfort Delgro, NTUC Comfort, SMRT, etc) have listed taxis as a public transport.
But everyone knows SBS buses and MRT trains are public transportations. If they are public, why are they earning profits in millions? I repeat MILLIONS. So why have fare hikes? Should not the earnings be channeled back to the public to offset the likes of diesel, petrol prices and also to keep fares affordable?
From SBS Transit corporate profile:
“SBS Transit aims to provide world-class public transport which is safe, comfortable, affordable, reliable and friendly.”
From SMRT:
“SMRT Corporation Ltd (SMRT) is Singapore’s premier multi-modal public transport service provider offering integrated transport services island-wide. ”
See the “public transport” word? It means to serve the public, not earn profits of millions. Also MPs are called public servants. Not earn millions out of them. Sorry I have digressed.
And what is the actual role of a transport minister (no disrespect here) when he cannot keep the fares affordable, lessen the jams and frustrations of motorists? C’mon, increasing road tax and having more ERPs gantries are not going to reduce the jams. No need to have a PHD to analyze it.
Read Minstry of Transport statement:
“The main focus of the ministry is to bring about efficient and cost-effective transportation to enhance our economic competitiveness and quality of life. It strives to make Singapore an international civil aviation and maritime centre for the region.”
If our public transport is very affordable, why would anyone need a car? If less cars, less jams, isn’t it?
And also Minister Raymond Lim’s transcript:
“Public Consultation, ERP and the Human Dimension
Q: What is the role that public consultation has played in transport planning? Do you take into account the human dimension?
Minister Lim: It is useful to explain the interplay between public consultation, the human dimension and transport policies. There is a view that transport issues are complex issues, technical in nature and so, it is better to leave them to the experts and not get the public involved. This view is misconceived and it is wrong.
Yes, transport issues are complex and technical in nature. But you need to get the public involved because transport impacts on their lives everyday. So we must engage the public. The human dimension is what informs our transport policies.
Q: How do you deal with tough policies like the ERP or inconvenience caused such as by the construction of the KPE?
Minister Lim: I think it is useful to engage the public on difficult issues, be it tough policies like the Electronic Road Pricing (ERP) or the inconvenience caused by the Kallang-Paya Lebar Expressway (KPE) construction. It is useful because by engaging them you give the public a better understanding of the wider issues involved, which go beyond their personal interests. And at the same time, it allows the policymakers, by engaging the public, to have a better understanding of their concerns. So you create a two-way process.
”
Again where is the public engagement or discussion?
I’ll make it simple for all to understand:
Taxi companies want more profit => Rentals hikes => Off set by fares increase. Cost transferred to commuters. => Less commuters taking taxi, more take buses and trains, or purchase cars. => Increase bus, train fares. More ERP, road tax. => SBS, SMRT profits higher. More hikes. => More consider taxis. => More use taxis. => More profits for taxi companies. => Rental hikes…
Happy New Year,
Kaffein
January 3rd, 2008 at 5:27 pm
Well, only Tony Tan himself knows the reason why he “sacrificed a million dollars career @ OCBC”, if indeed made a financial sacrifice at all, to become a cabinet minister. But we do know why he resigned his office, after he witnessed the slapping incident. And he came back to office only after being persuaded by Goh Chok Tong, after the fellow was diagnosed with cancer. Point is, do we a have a government with the heart to look after the interests of the populace, or do we have a gang of mercenaries with their eyes on their bank account only?
January 3rd, 2008 at 7:07 pm
Apologies for detracting from the main topic…
Easternwind :
How many ministers in our cabinet now are former bankers with the ability to command millions in the private sector? Should we benchmark all our ministers by the highest wage earner to ever join then?
Let us look at some examples of ministers that joined the private sector :
Yeo Cheow Tong joined Lippo, an Indonesian company as an associate director - do you think that that job will pay him more than a million annually?
Dr Seet Ai Mee is with Courts (Singapore) Limited as a non-executive director. Do you think that she is being paid millions?
Historically, most of our minister’s end up in government linked companies instead - it would not to overly speculative to think that there might be a scarcity of high paying position in top global companies awaiting our ministers in the private sector.
January 4th, 2008 at 12:31 pm
The PM cited Cedric Foo as an example of a past minister that can earn “more” in private sector. Hmm….who hired Cedric Foo??
Answer: JTC. Can JTC be considered private sector???
Also, what happened to past minister, David Lim?? Is he earning big bucks in private sector (excluding GLCs, of course) now?? I doubt so, otherwise our PM will cite him as an example.
Yam Keng: I prefer not to digress in this posting, but since one comment led to another…
Cedric Foo is Group Deputy Chairman at NOL. As far as I know, the Chairman of JTC is not executive and is also not paid, just like the other board chairmen and members of most statutory boards. It is national service for them.
Personally, I don’t think all Ministers (or Permanent Secretaries) will be great CEOs in pte sector, nor will every CEO become a good Minister. Public service and private sector require different skills, although there are certainly some common attributes between them. We have seen successful examples moving either ways, eg Lim Kim San, Tony Tan, Dhanabalan, Ng Eng Hen, Gan Kim Yong, Grace Fu.
The point is that when there is a potential good Minister currently in the private sector, should we expect the person to accept a huge pay cut to join politics? I am sure some people will, but this consideration will be a stumbling block to some. There could be very valid reasons, like a house mortgage, family commitments. I know of top lawyers who can earn more than a Minister’s annual pay just by winning a case - do we see many lawyers in the Cabinet?
The Ministerial pay adjustment is to narrow the gap so that it doesn’t become too big a factor when PM needs to persuade people to forgo his career to be a Cabinet member. For some people, it may be a point of no return after leaving an industry or profession for some years.
Short of paying every Minister based on his last drawn pay in the pte sector, the system has to be one that can be applied to all cases (albeit there is still a range of different grades and pay). Hence, I do believe while some Ministers may be suffering a pay cut, there may be some who do not get as much if they had stayed in their previous career.
January 5th, 2008 at 1:53 pm
“The Ministerial pay adjustment is to narrow the gap so that it doesn’t become too big a factor when PM needs to persuade people to forgo his career to be a Cabinet member.”
This is a very lame excuse that’s been repeated so many times that people are sick of it. You can use that line on school children but please, you’re insulting our intelligence when you try using it on us.
Obviously, the notion of “moral authority to lead” is not something that you understand.