There are people who will take cabs, and there are people who won’t. Quite obvious isn’t it? The only difference is, how many more will and how many more won’t. The PTC, in less than 2 weeks, approved the fare hike proposed by ComfortDelgro which generally saw a hike in 2 areas: (i) flag down rate and (ii) city surcharge, which will be extended all the way from 5:00pm to midnight, overlapping the staggered midnight surcharge that is currently imposed. This means that a typical ride from the city will incur a surcharge that follows:

  • Flag down rate of $2.80 (assuming a normal cab)
  • City surcharge of $3.00 (between 5:00pm and midnight)
  • Peak hour surcharge of $2.00 (between 5:00pm and 11:30pm)

Which gives a total of $7.80. If for some reason you decide to call a cab during peak hour, that will increase the basic fare to $11.30. This is comparative if you take a cab just before midnight (and with the disappearing syndrome still there), you end up paying about $11.40 (120% of $7.80 + $2.50).

The only thing that went down is prime-time booking surcharge from $4.00 to $3.50, although I don’t see how it can make a significant difference looking at how much more we are already paying for the basic fare.

Some cabbies are apparently cheering on the hike, citing the fact that people will just get used to the new taxi fares eventually. To the few that were interviewed, they probably feel that Singaporeans are very affordable and any furore over this hike will soon be over. After all, Singaporeans are known to have very short memory.

AN EXTRA $2 to pick up a passenger in the city area during peak hours is a welcome incentive for cabby Mohamad Sahat to head back to the city even without a passenger.

‘After taking passengers out of the city, and if I’m within a reasonable distance, I will go back to the city to pick up more passengers,’ said the 61-year-old ComfortDelGro cabby of 16 years.

The increase in the city surcharge from $1 to $3, announced by ComfortDelGro yesterday, along with other fare increases, will relieve the ‘pinch’ cabbies like Mr Mohamad have felt in recent months.

Cabbies interviewed said rising diesel costs and goods and services tax (GST) have increased their operating costs by 10 to 15 per cent.

To make up the difference, most drivers like Mr Mohamad have to clock an extra hour on the road. He now puts in 12 hours a day, six days a week, to take home about $80 a day after splitting the $100 daily rental with relief drivers.

‘The new fares will increase our income by a bit and help us with rising costs,’ he said.

ComfortDelGro said that after last year’s fare revision, cabbies took home about 12 per cent more.

Mr Robin Ng, president of the CityCab Operators’ Association, said the move to absorb Electronic Road Pricing (ERP) charges of drivers who cannot find a fare within 15 minutes of entering the city area will definitely help. ‘ERP charges are getting higher these days. It does not make sense for drivers to pay the ERP charge just to go into town to get a customer when they can get one outside without paying a cent.’

His views were shared by other organisations. The Taxi Operators’ Association (TOA) said yesterday in a statement that ComfortDelGro’s revision was a ‘fair and timely decision’.

‘TOA believes that overall taxi meter fare should reflect the operating cost of the taxi business, and the primary consideration is the income stability of the taxi drivers when fare adjustments are made,’ said the association, which represents six taxi operators’ associations.

Taxi drivers reckon the volume of passengers will decrease in the next few months but are not concerned about the long-term effect.

‘The demand drop will be short-term…I’m more concerned about the company than the commuters. Usually, when the company increases fares, it will raise rentals or take away other perks. I hope that doesn’t happen,’ said Mr L.S. Chew, 47, a cabby of 11 years.

ComfortDelGro indicated yesterday that it will not raise rentals following this fare adjustment.

It added that diesel subsidies and other benefits, which amounted to $73 million last year, will continue this year.

mariaa@sph.com.sg

I do find it interesting on how the papers or taxi companies commented that there is very little reason for taxi drivers to hide just before midnight. Going by any sense of economics, all it takes is just to hide behind some pillars (metaphorically) and taxi drivers will be able to get 10% more from their midnight surcharge.

However, this will only work if all taxi drivers are doing the same thing. Since this had already been practiced previously, it isn’t difficult to continue doing it. If you ask me whether this hike will solve the disappearing midnight problem, I’d say, there’s no direct effect. As long as there is an incentive to wait till past midnight, drivers will do it – just like how some of us will wait till past 9:30am just to avoid the $2.00 surcharge.

What I feel about the whole thing is:

  • There may be slightly more taxis in the beginning – partly because of the refund that the taxi drivers get from their taxi companies if they do not secure a passenger within 15 minutes of entering the city.
    • However, I feel that the taxi companies will eventually get back the money from the drivers by raising rental. After all, there is no free lunch in the world, at least not in Singapore
  • Passengers will get used to the new flag down rate and the problem will start all over again
    • Remember the time when the taxi fare was raised from $2.40 to $2.50 and many people swore off taxis? Look at what’s happening now. It’s just as crowded.
  • It does not solve the disappearing cabs before midnight problem, since the hike does not seem to address this directly
    • Rather, it seems to address the disappear cabs in the city problem

Despite all these hikes, the papers managed to find someone who is optimistic about the whole thing; people that will press on to take cabs despite the hike and all – with some feeling that it’s good that the taxi drivers will be able to earn more:

COMMUTERS, for the lowest taxi fares in town, look out for a copper-coloured Prime cab, at least for the next three months.

But be prepared for a long wait, as the company, which has said it will not raise fares for the time being, has only 100 taxis on the road – the smallest fleet here.

Most of the other companies said they would follow ComfortDelGro’s lead, so commuters should be prepared to pay between 18 per cent and 49 per cent more when hailing a cab during peak hours from Monday.

But the increase is unlikely to deter commuters from hopping into a cab. A poll of 20 commuters at Orchard Road yesterday found no one saying they would stop taking taxis because of the higher fares.

Half of them, including Ms Lili Yeo, a research writer with a finance company, said they would make changes, like take a train out of the city centre and then a cab for the rest of the journey to avoid some of the new peak-hour and city surcharges.

For the rest, taxis are and will remain an option only if they are late or caught in the rain.

Some raised concerns about whether, with the changes in the late-night surcharges, taxis will start to ‘disappear’ again just before midnight.

ComfortDelGro does not expect this to happen, given that the city area surcharge will be in force right till midnight, giving taxi drivers in the city little reason to ‘hide’.

One commuter said the higher fares are understandable as ‘at least taxi drivers will be able to earn more’.

Others, like Ms Angela Chan who gets around exclusively on taxis now, says she will plan her journeys better, but will not give up the rides.

The pastor takes a taxi every day from her home in MacPherson to her office in Chai Chee, a trip that costs her an average of $10. When the new price plan kicks in on Monday, she can expect to pay up to $11 for the same trip.

‘It’s money I’m willing to spend, because time is precious and it’s more convenient than a bus.’

Taking the MRT is often not a practical option, she explained, as she requires two bus transfers, and an extra 20 minutes, before she can get to the Aljunied MRT station, the closest one.

‘It’s erratic and unpredictable, and I waste quite a bit of time.’

While higher fares are unlikely to stop her from hailing a cab, she said she would consider making shorter trips, and then transferring to the MRT instead of travelling in a taxi for the entire journey. ‘I will definitely reconsider taking long trips in a cab,’ said Ms Chan.

Businesswoman Elena Ling said: ‘It’s not a drastic increase for those who can afford it.’

Her only concern: ‘What about the sick or elderly who need to take a taxi and can’t afford it?’

taniat@sph.com.sg

Articles obtained from straitstimes.com on 11th December 2007



Reader's Comments

  1. Heng-Cheong Leong | December 11th, 2007 at 10:14 am

    Just a small nit-pick. The taxi fare system has been deregulated for quite some time now, and the PTC does not have the authority to approve or deny any taxi fare changes.

  2. chewy | December 11th, 2007 at 10:37 am

    the person that came out with the fare structure must be trying to show off his/her good mathematical skill or trying to give reason to the company that program the taxi meter to charge higher price for complicated logic.

    Why can’t this pple understand that a simple system is always the best system. With the current fare structure.. we are left with 6-7am and 930am-500pm which is non-surcharge. Understandably, we can expect the taxi driver will take a rest and have their coffee from between 6-7am.. that makes it 930am-500pm only time for no surcharge.

    If so many has expressed that surcharge is the root of all the disappearing syndrome.. when can’t they just raise on average 40% from current taxi fare and do away with the surcharge system? With simple structure, no incentive for commuter to wait for after 930am, or for taxi driver to wait for after 500pm to appear..

    Why can’t these pple get the point? Hmm..

  3. » Dramatic increase in Taxi prices from Monday onwards A new beginning: Thoughts and experiences of my life | December 11th, 2007 at 1:18 pm

    […] SimplyJean has written a very nice article on it which can be found here. […]

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