I was flabbergasted after reading a news article in yesterday Straits Times with a heading… “Cabbies cry foul over rival drivers”.
In the first place, the news article reported mainly the opinions of a single person, Mr. Ang Hin Kee, who is NOT a cabby but an adviser of the National Taxi Association (NTA) and a Ang Mo Kio GRC, Member of Parliament. Undoubtedly, his views cannot be depictive of Singaporean cabbies in general. To me, he seems more like a spokesman of COMFORT which Temasek has an interest than of Singaporean cabbies.
As a cabby, I would like to share with you my views in respond to his statements.
1. Mr. Ang said “These companies are “creaming off profits” without having to meet the stringent requirements and standards the taxi industry has to meet”.
I shall break this statement into two parts.
Firstly, these “companies” refer to Uber, GrabTaxi, Hailo and EasyTaxi, that are Taxi Booking Apps providers.
I think Mr. Ang is essentially saying that COMFORT is the only taxi operator whose profits from taxi booking is now being “creamed off” by these companies because others taxi operators like Premier, Transcab, SMRT or Prime are not affected as they inherently have very few taxi booking jobs. Consequently, my heading for the news article would instead be “COMFORT cry foul over transport providers app”.
By the way, how much is COMFORT estimated earning from taxi bookings before competition?.
Assuming each COMFORT taxi driver does an average of 10 booking jobs a day (24 hours) and COMFORT deduct 30 cents per job from their driver. Therefore, COMFORT earns $3 per taxi per day.
COMFORT has the largest fleet of about 16,000 taxis. Assuming 80% of their taxis are active on the road, therefore, COMFORT earns $3 x 12,800 taxis = $38,400 per day. Multiply that with 365 days. Wow! $14 millions annually.
COMFORT is now losing about 25% of booking jobs to these app providers. i.e. about $3.5 million per year. And this lose will surely increase when 3rd party booking apps becomes more popular with commuters. This “threat” is real as COMFORT is now occasionally absorbing the 30 cents surcharge that they previously charge their drivers. In offering this minor incentive, they hope their drivers would concentrate on doing COMFORT call bookings instead of their rivals.
Is COMFORT cabbies earning affected by these companies?
Yes, but in a positive way. The 3rd party taxi booking apps has turned out to be the best things that ever happened to Singaporean cabbies. Opportunities and options to earn more are open to all taxi drivers. Many COMFORT cabbies are using the 3rd party apps to do more booking jobs and earn more especially when these companies enticed them with incentives.
For example, Hailo is now giving an incentive of $160 for FIRST 40 jobs done between 1st.June to 15th June. And another $100 for every 20 jobs after the first 40. In a month, a driver can earn an extra $320 – $500. Other transport app providers are also giving drivers incentives in various forms.
2. Mr. Ang’s continuous statements: “It’s an issue of a level playing………………….thanks goodness, we’ve not had any major incident”.
(His full statements are in a photo at the end of this post).
Briefly, Mr. Ang is making lame excuses to kill off competitions from Uber and others. His various concerns and issues will soon be comprehensively addressed in LTA new rules and regulations for 3rd party taxis booking app and ride-matching services.
Now, to be fair to the reporter of this news article, Mr. Christopher Tan, he has pertinently highlighted an impending “tsunami” that will completely change the landscape of the taxi industry here.
The “tsunami” is the new breed of Uber drivers who use their own or rented private cars to ferry paying passengers through call bookings. Soon, Grabtaxi and other transport app providers will also be joining the fray. These innovative apps companies are effectively running a parallel taxi operation, albeit strictly through call booking only.
Undeniably, they help to service “peak-hours or other un-catered excess demand”, long ignored by monopolistic taxi operators like COMFORT and they will absolutely improve taxi availability for commuters as a whole. Like hotel and travel agents booking app or online purchases portals, they are not parasites which lives on the hospitality of others but modern technological companies that provide a complimentary, convenience and useful service that consumers need.
Presently, new rules and regulations are not in place yet to address safety and security issues of commuters using these alternative taxi services. Reliability and accountability of these transport app provider are also pending. However, once LTA’s all-embracing controls are fully implemented, taxi commuters’ confidence and trust in these companies will rocket. And like in a G.E., scare tactics to avoid Uber or others would not work.
In this situation, Uber will creates a foothold in the taxi community after its popularity with customers grows. Taxi operators like COMFORT are very worried because the Uber business model of getting a taxi or ride-matched car via an app is superior to having to call them for one on the phone and wait for it to show up, if it shows up at all.
But taxi drivers are not worried. Why?
Because taxi drivers are hirer of taxis not owner. Therefore, they can easily defect to Uber as their drivers or drives their own car using Uber app, if it makes economic sense to do so or for other reasons. Like room renter who disappear from their units in the middle of the night, the drivers can desert the taxi operator freely. And like the saying goes, “If you can’t beat them, join them!”.
Please allow me to make a simplistic comparison to check whether it makes economic sense to desert COMFORT to join Uber.
COMFORT Sonata Uber Toyota Aries
Daily Rental: $106.00 $56.00
Fuel Cost (250km): $30.00 $25.00*
Misc Expenses: $4.00 $ 4.00
Total Cost: $140.00 $85.00
Fare Collection: $230.00 $230.00
Company commision: $00.00 -$ 46.00 (20% of Collection)
Nett Income: $90.00 $99.00
(* Cheaper fuel from JB.)
If my estimation is accurate, it means a driver can earn more with Uber. Needless to say, a Uber driver could earn much more if he use his own car as the rental cost is not in the equation.
This is a disaster scenario for taxi owners like COMFORT. It is an expensive operation to constantly keep a large fleet of taxis on the streets of Singapore. COMFORT’s main source of revenue is what they receive from the rental fees of drivers, so if too many cabs stand empty for too long, COMFORT will not only had their profits “creamed off” but will face bankruptcy.
What does this all mean for the Singaporean cabbies?. It means hallelujah, leverage has arrived at last. It has arrived not through feeble threats of strikes or work stoppages, but through competition for the services of drivers.
Now, for the first time ever, taxi operators will have to give serious consideration to how their actions affect the lives of their drivers. If they are wise, they should think of how to improve the working conditions of their drivers – like reducing the 250 km minimum mileage, high rental, indiscriminate sacking, repair costs and so on.
Hey, COMFORT, do you want your drivers to desert you ?. The days of your authoritarian, arrogant, uncaring and high-handed attitudes towards your drivers need to change. Remember, they are your partners not employees!
How about doing some surveys?
Find out what’s really needed and wanted from the drivers.
And then give them some good reasons to stick with you or you prefer to sack them for frivalous reasons despite the fact that many of your drivers had been your royal partners for more than 20 years?.
By the way, I am mulling to be a Uber-X driver.