OPERATORS WOES – AND SOLUTIONS
Trans-Cab, the island’s second- biggest taxi operator with a fleet of over 4500, slashed its cab rental rates in a bid to reel in more hirers. Rental fees for taxi drivers running the cab themselves – without a relief driver – were cut by between 22 percent and 34 percent, depending on the taxi model.
Lowering rentals is without doubt a bottom line-driven decision by Trans-Cab, which had 500 out of its 4500 taxis, or about 11.1 percent, sitting idle in the yard when it announced the move late last month.
It was welcomed by taxi drivers as it helped lower their overheads. Many cabbies are also optimistic that Trans-Cab’s move will prompt other operators to do likewise to stay competitive.
There is room to manoeuvre. Locally listed ComfortDelGro Corp – which owns the largest fleet of over 16,700 taxis here, and which has taxi operations overseas including in Australia and Britain – posted an operating profit of $47.3 million from its taxi business in the third quarter of last year. This is 1.5 per cent higher than in the same period the year before.
For cab operators, keeping their rental rates competitive ensures that there is a healthy supply of taxis – keeping them in the game. But even as rentals fall, taxi drivers need passengers to get an income.
One gripe is that business at night has been hit especially hard because passengers are opting for private-hire services, as they do not impose a 50 percent midnight levy.
Cab operators should simplify the current taxi fare structure, which many commuters also find confusing. Flag-down fares range from $3.20 to $3.90 and there are at least 10 different types of surcharges.
In comparison, commuters who use Uber and Grab are quoted an upfront charge when they book.
What about cutting fares further – will this dent the incomes of taxi drivers? Whenever Uber slashes its fares, it says that lower fares mean higher demand from passengers and, hence, more trips for its drivers.
Cab firms should study how lowering fares and simplifying them can win back commuters, and help cabbies generate more income without hurting them.
WHAT DRIVERS COULD DO
“Sweeping the street”, which in cabby lingo means picking passengers from the kerbside, continues to be an important source of business for taxi drivers.
Street-hails accounted for about 75 per cent of taxi rides between January and September last year, according to data from the LTA.
Bookings comprise the remainder – with two-thirds of these made via the taxi operators’ own booking channels, such as mobile apps and phone hotlines. The remaining third are bookings through third-party bookings apps.
For taxis, picking up street-hails is an advantage they have over private-hire cars, and one which the Government is likely to preserve. Allowing private cars, even if they are Uber- and Grab-registered, to do so would run the risk of having Singapore return to the days of “pirate” taxis in the 1960s.
Ride-hailing apps, on the other hand, work because fares are set beforehand, with the behaviour of drivers and passengers monitored through the apps’ system of ratings and reviews.
But while street-hails are an advantage, picky cabbies who decline to ferry customers to far-flung locations such as Tuas have been a long-time bugbear. This has to change. Commuters who use Uber, for example, do not face this problem, because their destinations are made known to drivers only at the point of pickup.
Cabbies should also play to their strengths, such as having a good knowledge of routes and a keen understanding of traffic conditions. In contrast, their private-hire rival might be a driver who is a part-timer just trying to make a quick buck.
In London, black-cab drivers have to pass the Knowledge, a geographical test which requires an average of about three years of study, and has students memorising 25,000 streets.
While Singapore’s cabbies have to undergo only 25 hours of training, they can take a leaf out of the London drivers’ books and aspire to be encyclopaedias of Singapore’s roads.
Another suggestion: Uber and Grab drivers are expected to consistently deliver good service because they are rated by passengers after every ride, and falling short could earn them a suspension or expulsion.
Taxi companies can look into incorporating such a system.
Regulations – whether favouring the incumbents or hindering the new players – are but one part of the equation.
To keep up with the competition, taxi operators need to innovate and find new ways to help their hirers, while cabbies need to up their service game to win customers over.
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Related story: Rental cars, unhired taxis sitting idle
