Bharati: So you're not advocating that
private-hire car services be regulated beyond the regulations that
have already been announced?
Ang: Put a bit more impetus to revamp the
industry instead of using older proxies and yardsticks to measure
the performance of a taxi operator; and the livelihood of the taxi
driver.
Bharati: Don't you think that the taxi
operators can do something to step up to the plate right now,
instead of waiting for the LTA to do something?
Ang: Both sides. Because on the one hand, the
regulatory control does need to be calibrated to be suitable for
market needs. On the other hand, as a profit-making company, taxi
operators need to step up and do a little bit more than what
they've been doing.
In many of your programmes in the past, we have talked about
taxi operators needing to be more innovative, and to a certain
extent we are glad that this competition has put the pressure on
existing operators to see how can they up their game, in order to
do better for the drivers, as well as the commuters.
Bharati: In your interactions with taxi
operators, to what extent do you really feel that they are feeling
the pressure right now, enough to effect change? Because, for so
long there were problems, and they were not doing anything to
change. It took other players to come in before the operators even
woke up. But they woke up to say that the playing field is not
level. They didn't wake up to say: “We must do better."
Ang: Correct. So let's continue to make sure
that there's a concerted effort not only from the drivers’ point of
view, but also from the regulators and other stakeholders.
The taxi business needs to look at a revamp. They may have been
comfortable in the past, but now, there's a need to be more
innovative, or push a bit harder with regard to how they share
profit, with regard to how they design their contracts, with regard
to how they make money.
THE RISE OF A MONOPOLY
Bharati: Recently, you said that private-hire
services slashing fares is a bad idea. Many on social media have
said that instead of competing fairly, the taxi companies and the
National Taxi Association made up of taxi drivers, are just being
crybabies. Why don't you just step up to the plate and do better?
Why complain? What do you have to say to that?
Ang: I think we are looking at some of the
developments by the private-hire cars; in terms of say, reducing
their flag down fare by 15 per cent, but not changing the terms for
the driver. Whether it's a price war or trying to capture certain
market segments, that's a business decision. And commuters will
definitely benefit from a lower fare.
However, if you make a business decision based on making up for
the commuter discount from the drivers’ earnings, not from your own
profits, or your own venture capital fund, the driver has just got
to work harder to earn the same amount.
What we're saying is: Use your own profit, and contribute it as
a coupon or a discount to the commuters, but don't take it from the
drivers.
Bharati: But if you're talking about Grab, they
are offering a fuel discount program to their drivers, a passenger
finder feature to notify drivers of places where passenger demand
is high. The drivers can also buy a smartphone at a subsidised rate
of S$150, and will be given increased insurance coverage. So they
are providing incentives to the drivers as well.
Ang: There is a popular saying on the street:
“The wool is always taken from the sheep's back.” You're just
cutting off the wool and giving it back to the sheep. So it's
taking from their earnings, and giving it back to them in a
different form.
Bharati: Even if you feel that’s unfair, why
worry when market forces would probably do the trick. If drivers
are not happy, they can leave.
Ang: I think competition does bring about that
kind of benefit to the driver, but by extension, if this market
practice, or this mode of business operations continue unabated,
and the other operators, too, start taking this approach and say:
“This is something that I can make viable. I will find ways to
either cut down the flag down fare, or increase the commission
share in order to increase my market share”, over time, this will
become a trend. I may come across as an alarmist, but this will
become the modus operandi. Then, what will happen is the driver
over time will suffer.
Hopefully, the free market will kick in and none of the players
will become a dominant monopoly. There will be equivalent forces
checking and balancing one another to ensure that commuters will
benefit.
Bharati: But you're afraid of the other
outcome, which is that there will be, again, one player emerging,
and there being a monopoly in this sector, which wouldn't serve the
commuters either.
Ang: Yeah, it's almost like letting history
repeat itself. Today, there are five to six taxi companies in
Singapore. There should be enough free market forces to have checks
and balances, one against the other. But, the size of the players
varies. One player is much bigger than the rest. It doesn't really
create that check and balance. So you say, okay, let's introduce
private-hire services. By all means, come onto the scene, but over
time, will this industry also evolve into a big monopolistic player
or two, and therefore dictate both the price to taxi drivers and
the fare to commuters. I hope that won't happen.
Alternatively, it could go the other way, whereby there's surge
pricing. When the demand is very high and many people are looking
of transport, are you willing to pay two to three times the going
rate? Then that doesn't become a public service vehicle any more.
The person with the highest need, or the deepest pocket, will get
the service.
Bharati: But private-hire cars are just that,
they're private-hire cars. They're not pretending to be taxis.
Taxis could provide that public service, make themselves available
on the roads, pick up flag-downs, make themselves more reliable
than private-hire cars, so that if private-hire car services
develop questionable practices, consumers can decide not to use
them.
Ang: But if you have a bigger market player
emerging from there, your commuters will invariably flock over
there to take that service. If the market is played out fairly,
nobody is being monopolistic and, everybody treats everybody fairly
- that's a good outcome.
Bharati: Why aren’t you more optimistic of a
good outcome?
Ang: I think innovation is good. I believe that
market forces, when played out with enough players, will offer a
good check and balance. But let's make sure that behaviours and
activities by these companies ensure that outcome. An effective
free market entails that there are enough players who will be able
to compete with one another.
