Come 17th July 2008, taxi rides is going to be more expensive. The taxi operators association have decided amongst themselves that they will be implementing a fuel surcharge to "help taxi drivers offset the cost of rising diesel cost". This effectively ups the current minimum flag down rate of $2.80 to $3.10 for normal taxis. This was a unilateral move by the taxi companies without seeking consent from the Public Transport Council, of which the jurisdiction does not include taxi operators.

The last year has seen the most number of fare increment there ever has been in the history of taxi fare revisions. This is despite the last (empty) threat by commuters to swear off taking taxis after the last revision. This happened end of last year. However, came Lunar New Year, business was so brisk for taxi drivers that they could afford to pick and choose passengers. They are, however, taking a different stance when it came to fare revision, stating that raising fuel cost has a great impact on them.

Thus far, very little help had been offered by the taxi companies, to whom taxi drivers pay their rent to. This had been the issue of debate since fare revision and tough times came into the picture. People have been questioning on why the taxi companies care only for their bottom line and not the welfare of their own taxi drivers – pushing cost issues away and letting it be the burden of the commuters. Inevitably, commuters end up paying higher fares with a small number shunning taxis altogether.

Academically, increased taxi fares may result in lesser ridership, and taxi drivers should be bracing themselves for tough times ahead. However, as shown in the last increment, the drop is temporary in nature because perpetual taxi commuters may find it hard to switch to other forms of public transport. In fact, the papers reported that taxi operators (drivers?) hailed the move and Cabby Tan Soon Huat even commented that he "think the 30 cents surcharge is quite reasonable and he just hope commuters see it that way too". I wonder how many taxi drivers share the same view as Cabby Tan.

I wonder if the surcharge will become a permanent fixture if and when the price of diesel ever drops.

I know that driving a taxi is not easy, but the taxi drivers are not the only group of people who are hit by the raising cost of fuel. In fact, when fuel prices go up, everything else is affected because everything will indirectly be dependant on fuel. Moreover, we are experiencing high inflation now and the solution, it seems, is to live it out.

Soon, taking a taxi will be like taking a plane trip – fuel surcharge, location tax (airport tax) and perhaps, security tax? I wonder if there will come a time where every passenger in the cab pays the displayed fare at the destination. GV2, anyone?

Cabbies to levy 30-cent fuel surcharge from July 17

By Christopher Tan

TAKING a taxi from next Thursday will cost 30 cents more a ride.

ComfortDelGro, which runs a fleet of 14,000 cabs, on Friday announced that it will impose this fuel surcharge on all taxi rides to help cabbies offset what it called ‘persistent and sustained’ increase in diesel price.

It said the surchage is in response to feedback from its taxi associations – Comfort Taxi Operators’ Association and CityCab Operators’ Association.

The operators of the other 10,000 taxi are expected to follow ComfortDelGro’s lead and introduce the 30-cent diesel surcharge.

Global oil prices, which are currently trading at an all-time high, have more than doubled in the last 12 months.

In the last six months alone, net pump prices in Singapore have risen by more than 50 per cent to $1.83 a litre of diesel fuel, said a ComfortDelGro statement.

The taxi operator said the surcharge is a temporary measure to offset the spiralling increases in diesel costs and will be removed when diesel prices fall back to $1.19 per litre, which was the market price last Dec 17.

Mr Yang Ban Seng, CEO of ComfortDelGro’s Taxi Business said the decision to impose a diesel surcharge has been taken after very careful consideration.

‘For the last six months, we have been absorbing a large part of the increase in diesel costs so that our drivers can enjoy a low rate of just $1.19 per litre of diesel, compared to $1.83 per litre if they had pumped outside,’ he said.

‘But even at this subsidised rate, our drivers are still paying about 40 per cent more than what they were paying six months ago before the fare revision and the indications are that oil prices will continue to remain high.’

Operators hail move
The move was hailed by taxi operators.

Cabby Tan Soon Huat, who has been driving a Comfort taxi for 14 years now, said: ‘I have been driving a taxi for many years and this is one of the toughest periods I’ve gone through. Each time I go to the pump, my heart skips a beat. I think the 30 cents surcharge is quite reasonable and I just hope commuters see it that way too.’

ComfortDelGro, which operates in-house pumps for its 32,000-odd drivers, said it has been absorbing the bulk of the increase in costs. In the first three months of the year alone, the Group incurred a $6.3 million loss on the sale of diesel.

Despite the large subsidies that have been offered by the Group, the company said its drivers still have to pay about $15 per taxi per day – based on an average consumption of 45 litres per taxi.

At 30 cents per trip, the diesel surcharge amounts to a 2.6 per cent increase in average taxi fare, based on an average trip of 9.3 km.

a cabby makes about 30 trips a day, the diesel surcharge will raise his daily takings $9.

‘This will help drivers to meet some of the increase in diesel costs that they are bearing,’ said ComfortDelGro.

‘The surcharge, which will go entirely to the driver, is a temporary measure to offset the spiralling increases in diesel costs. It will be removed when diesel prices fall back to $1.19 per litre which was the market price Dec 7, 2007.’

Supporting the surcharge, Mr Seng Han Thong, Advisor to the Taxi Operators’ Associations, said: ‘We strongly support this flexible measure. The increasing diesel prices in recent months have added heavily to taxi drivers’ operating costs and affected their income.

‘We believe that the fuel surcharge will help lighten the burden of the rising diesel prices on taxi drivers effectively. We call on other taxi companies to continue helping their taxi drivers cope with rising diesel prices. At the same time, we urge all taxi drivers to continue maintaining high service standards to encourage more passenger trips.’

Added Mr Nah Tua Bah, Comfort Taxi Operators’ Association President: ‘The surcharge will really help our drivers. On behalf of our drivers, I seek commuters’ understanding that this is a temporary and necessary measure.’

Source: Straits Times Interactive,

Article extracted on 11th July 2008

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