ST Saturday Special Report: Bumpy Ride for Cabbies

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In this Saturday Special Report, the story tells of the changing taxi scene in Singapore.

"It's been a bumpy ride for for Singapore's taxi drivers in the past few years. Squeezed by operators, diesel pump prices, taxes and rough customers, their litany of complaints has just grown longer. What lies ahead for this profession of last resort?"

Read On....

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The journey past
RACHEL CHANG catches a ride with two cabbies, one who's retiring and has seen it all, and another who's just starting, with a long way to go

MR JOSEPH Chong turned 60 in June this year. He celebrated in style with his wife, two children and two grandchildren at Genting Highlands.
On Sunday mornings, he goes to church. On Sunday afternoons, he does the cha cha with his wife at the community centre across his three-room flat in Teck Whye.

A few times a week, he plays mahjong at 4am, after he and his friends have made enough to cover rental and diesel for the day.

For the past 26 years, he has been a night-shift taxi driver. The pre-university drop-out and former policeman got behind the wheel in 1980, when his children were just three and eight.

Today, his son is 29 and runs an event management company. His daughter, now 34, is a bank vice-president.

'When I started, we could earn more than office managers. If we worked hard, we could take home $3,000 a month,' he says. 'Our family went on holiday every year.'

By day, he ferried his wife, Madam Chionh Siew Lam, a housewife and now 55, around and his children to school.

At night, there were 3am coffee dates to look forward to with his fellow witching-hour drivers.

But time, he laments, has not been kind to the taxi driver. Back then, you could own your own cab after paying off all the instalments. Drivers also had more freedom - to go on holidays, to take breaks, or just to be sick.

'Now, everyday you have to pay rental, whether you are driving or not on that day,' he says.

The first $70 he makes these days goes towards covering costs. He pays about $45 rental for half a day - the day-shift driver pays the other half - and almost $30 for diesel.

About 20 years ago, he would have been able to take home $40 of that first $70. When drivers were allowed to own cabs instead of renting from the company, daily instalments set him back only $20, and diesel another $10.

But he's still at it because he would be 'too bored' sitting at home 'staring at the TV'. Describing himself as 'semi-retired', he says he 'takes it easy' most days, driving only seven to eight hours of his 12-hour shift.

He reels off his list of illnesses - diabetes, high blood pressure, high cholesterol, heart disease.

'I take 13 pills a day,' he says. 'Taxi drivers always have these illnesses. We don't exercise, and we don't eat healthily.'

But the changes over the years haven't all been dire. For one, the public has also become more accepting of the profession. When his son was in secondary school 15 years ago, his teacher labelled all taxi drivers 'barbarians'.

But those old prejudices have gone away, along with shoddy service and little accountability.

'People aren't afraid of taxi drivers anymore. They are not scared that we will hurt them, or cheat them,' he notes.

Similarly, gone are the days when he and other drivers treated passengers a lot worse than they dare to now. 'We would scold them if they angered us. Or if we didn't want to drive somewhere, we would just blow them off,' he recounts.

Now, with so many taxis competing for the same business, all drivers are on their best behaviour.

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Full Story
Bumpy ride for cabbies
Old-timers like to bemoan that particular 'last time', when life on the roads had fewer potholes. So, what lies ahead? RACHEL CHANG flags down some cabbies for a chat and gets feedback from industry players and observers

THE refrain 'last time...' is a favourite with long-time taxi drivers.
Mr L. S. Char, 53, likes to recount: 'Last time when it was raining, I wouldn't drive. I would sit at the coffee shop until the rain stopped. Now raining, bo pian (no choice in Hokkien) better drive.'

'Last time can see all those semi-retired uncles driving a few hours a day just to make some money. Now they cannot survive, you need to make $130 a day just to cover costs.'

'Last time better, not so many cabs. Now, if I'm going for lunch, and someone flags me down, I'll pick up the passenger first, then go for lunch. Or else after I finish lunch, no more passengers.'

'Last time' refers to the bygone pre-1998 era...when taxi licences were still tightly controlled by the Registry of Vehicles, now known as Land Transport Authority.

Then, Mr Char had 17,800 competitors. Today, he has 22,600.

Deregulation of the taxi industry began in 1998, to provide 'more flexibility for operators to respond to changes in market conditions, to implement differential pricing to balance supply and demand at different times of the day, and to introduce and set prices for innovative services'.

Eight years on, the only substantial impact of this move has been a steady, 25 per cent increase in the number of taxis plying the streets.

The last three years have also seen the formation of three new taxi companies - Smart, Premier and Transcab.

In other ways, deregulation has not wrought much change. Fare structures remain almost identical. Rentals hardly vary. And if 'innovative services' refers to things like TV screens in taxis, few passengers take note.

From most cabbies' point of view, life has just been harder on them.

More taxis are now competing for customers. Cabbies blame that, as much as increased diesel prices, for their dwindling income.

Taxi stands are deserted. Cabs cruise around in convoys.

'There's no space for us to even queue at taxi stands,' bemoans a driver of eight years, Madam Toh Leh Kim, 44, pointing to long lines of empty cabs, a common sight these days.

But for operators, there is every incentive to increase their fleets. Every vehicle they lease out brings in a daily flow of rental income.

With falling car prices, operators make their initial outlay back in rental from drivers in three years or less, estimates civil engineering Associate Professor Lee Der-Horng from the National University of Singapore, who specialises in transportation systems.

Yet, despite these savings, rentals have remained stagnant since 2000. Cabbies pay from $65 to $88 a day for a normal taxi, and up to $120 a day for a 'luxury' Maxicab or Mercedes cab.

Overall, experts say, deregulation has led to more competition on the streets among cabbies, but less so for operators.

ComfortDelGro, which operates three brands of taxis - Comfort, CityCab and Yellow-Top - enjoys a market share of over 70 per cent. Its fleet of 16,000 cabs is almost three times that of all its competitors combined.

Its dominance means it has no need to take competitive measures, such as lowering rentals to snare drivers from rivals. Its sheer size ensures it has the widest-reaching call booking system and generous welfare benefits such as plump insurance payouts and grant bursaries for cabbies' children.

For drivers, this means the benefits of staying put outweigh those of jumping ship - to avoid, for example, the flat $2,000 which ComfortDelGro charges for accidents caused.

Other operators have little motivation to lower rentals either, as that will not increase demand for their taxis.

THESE days, neither commuter nor cabby is happy with the status quo. Despite the jump in the number of taxis plying the streets, supply still falls short of demand during peak hours.

As long as commuters complain of being unable to flag down a ride, operators will continue to expand their fleets.

Dr Terence Fan, from Singapore Management University's Lee Kong Chian School of Business, notes: 'As far as the taxi companies are concerned, they are relatively shielded from day-to-day market changes, since they earn fixed rentals from taxi drivers.

'It's the drivers who bear the revenue risk...Thus operators are economically motivated to expand their taxi fleet...even if the entry of a new taxi reduces the take-home pay of their existing drivers.'

Until there is no one applying to drive taxis anymore, operators look set to increase supply. They will only stop - and possibly too late - when 'no one is willing to rent the last, new taxi...and this happens only when the take-home pay for taxi drivers becomes so low that it is just not worth it for anyone to enter the profession', he says.

There are signs that this is already happening. The bigger operators are experiencing possibly the lowest hired-out rates ever, of between 70 and 80 per cent, and have begun addressing cabbies' woes.

ComfortDelGro said that the recent fare hikes in July were designed to compensate cabbies for rising fuel costs and address their falling income.

Since then, its group corporate communications officer Tammy Tan says, its drivers have seen an average increase in monthly income of about 8 per cent, despite the fact that they now make about 3 to 4 per cent fewer trips.

But it could be too little, too late.

Mr C. H. Koh, 58, who has been on the road for five years, laments: 'Every taxi driver I know has seen his income fall since the fare hikes.'

Although experts believe Singaporeans will resume their old habit of hopping into taxis once the 'initial shock' of the price hikes fades, cabbies still see no sign of this, two months on.

Driver of two years P. P. Ow, 53, frets: 'Once consumer behaviour changes, it might never change back. When people see how much money they save from taking the MRT, they may never take taxis again.'

COMMUTERS are similarly peeved at the recent changes. One theme is always echoed: Why can't taxi operators help cabbies at their own expense?

In a letter to The New Paper in July, reader Carey Ng noted: 'I understand that Comfort is trying to make its drivers' lives easier, but why must it always be at the expense of the commuters?

'When will the company start to take some responsibility for its employees, who have helped it become the largest taxi company in Singapore?'

Taxi drivers, however, are not treated as employees. They are considered self-employed.

They do not have CPF. No guaranteed fixed income. And nothing like annual leave.

Experts suggest that it is this power imbalance - wherein the operator's bottom line is not at all impacted by the driver's - that has led to a reluctance to lower rentals despite much clamour.

'What it translates to is a cosy oligopoly of taxi companies - leading to high profits to these companies and at the same time low pay for cabbies,' says Dr Fan.

That, to Prof Lee, indicates market failure in the taxi sector. It is clear the industry cannot resolve its own problems without intervention - because bit players lack the power to bring about substantial change, he says.

In his view, regulation is necessary because of imperfect competition.

'It's because the industry is practically a monopoly, that the Government should regulate it,' he says.

BUT the Government's hands are tied because taxi pricing has long been both fundamentally flawed and politically thorny.

Taxis - everywhere else a premium chauffeured car service and topping the hierarchy of transport modes - are bewilderingly priced somewhere in between buses and MRT here. In fact, sometimes it is cheaper for four people to share a cab than take a bus or the train.

As such, in Singapore, demand has exploded given the relatively low prices, coupled with door-to-door convenience.

Prof Lee notes: 'People in Singapore have the tendency to consider taxis as part of the public transport system. This is not so in other countries, where taxis are considered exclusive, to be taken only in emergencies.'

Taxis here are stuck in the volume 'supermarket business' rut, unlike the more rarified, 'boutique business' it is elsewhere. About 876,000 taxi rides are taken here each day. And continually increasing taxi fleet supply looks set to stoke demand further.

There is the need for 'better market segregation' and the price gap between taxis and buses to be widened. Currently, the line between taxi and public transport is too vague, he argues. However, any attempt by the Government to 'right-price' taxi fares could involve a 'substantial political price', he warns.

That was deemed too heavy for policymakers to pay in 1985. In a double-barrelled measure to cool the demand for taxis, fares were jacked up by 30 to 150 per cent and a taxi diesel tax - six times that of road tax then - was imposed.

Overnight, the number of taxi commuters and cabbies' income took a nosedive. Hard-pressed cabbies had to offer 'special discounts' to lure them back.

In an embarrassing U-turn just a month later, the Government revised the new fares and tax downwards to placate the people. Since then, beyond marginal fare increases, it has resisted further attempts at 'right-pricing' taxi services.

BUT the troubling reality of a permanent underclass of disaffected taxi drivers remains. And the Taxi Operators' Association, headed by MP Seng Han Thong and a branch of the NTUC, has been trying to chip away at the long and loud list of cabbie woes.

Together with the Singapore Taxi Academy, it hopes to succeed in 'job redesign' for cabbies - to enlarge their job scope, increase their earnings and make it a more viable profession, instead of the 'job of last resort' it currently is.

So far, 783 taxi drivers have gone through training to double up as tour guides. Those who are awarded a taxi-tour guide (TTG) licence get to ferry airport transit tourists to attractions here for $35 to $45 per hour. There are currently 171 such licensed guides.

Mr Quek Chin Wee, 62, has done about 40 jobs as a TTG since he passed the four-month-long course two years ago.

'Not a lot,' he judges.

Then there is the Taxi Medical Transfer Chaperone Service, where cabbies act as chaperones for medical tourists who need to make regular trips to hospitals.

Conceived by hospitals here, it trains cabbies to 'take care' of and ferry patients who fly in for medical treatment. The first class of about 100 cabbies is being trained now.

However, these initiatives have hit some bumps.

Foremost is the notoriously difficult-to-pass TTG test, which is the same one professional tour guides here take. It requires candidates to expound knowledgeably on a random tourist spot or plant or food to a panel of examiners.

Among the first batch trained in 2003, only 30 of the 102 cabbies passed the test.

'It's very challenging. You must know a lot about Singapore, and you must know how to talk. It's not meant for everyone. Most who fail give up,' says Mr Quek.

Others question if these initiatives only preach to the converted - who are already conscientiously upgrading themselves. Of the 100 or so cabbies enrolled in the Taxi Medical Transfer Chaperone course, about 80 per cent are also certified TTGs. A further 20 per cent have taken but failed the TTG course.

The vast majority of cabbies say they lack either the intellectual capacity, inclination or time to participate in such fancy courses.

Mr Low Chee Juay, 53, has no illusions about why he has been driving a taxi for 10 years.

He pares it down to this: 'When you're young, you drive for your kids. When you're old, you drive for your doctor.'

Despite many efforts to make cab-driving a viable long-term vocation, ComfortDelGro's data shows that the average time a cabbie stays on the job before moving on is just three years.

Most new entrants are men broken by the stock market or retrenchments. For most, taxi-driving is but a temporary stop-gap measure till they find their feet again.

Mr Ow, 53, who got behind the wheel after he was outplaced from his systems analyst job two years ago, already has an exit plan.

'I am learning forex trading now. Driving taxis is too hard,' he says.

Former door-to-door salesgirl Ng Bee Lan, 33, who has been driving for eight months, agrees.

'I want to find a more stable job, maybe bus driving,' she says.

There is also the prevalent view among cabbies that the Taxi Operators' Association - structured according to operators - does not represent them fairly. Taxi drivers see it as 'too close to the big companies' to champion the small-time driver.

Mr Joseph Chong, 60, who has been on the road for 26 years, bemoans the flimsy life insurance coverage it offers.

'They say they'll give your family a lump sum if you have cancer and die. But this is if you're holding on to the car.

'If you're really sick with cancer, you can't afford the $93 a day to keep the taxi. You're not driving and they won't waive rental. Once you give back the car, then your insurance is also gone!'

So why hasn't he aired his grievances to the association?

His answer typifies most cabbies' lurking distrust: 'The company is the union, the union is the company.'

WITH so many reasons to quit, why do some drivers stay the course?

After all, Singaporean customers are notoriously hard to please. Brickbats still far exceed bouquets, despite industry-wide efforts over the years to step up service.

ComfortDelGro logs 90 complaints against cabbies daily, compared to just nine compliments. This is partly because of 'increasing awareness of commuters of their rights, and the increased number of taxis on the road', says LTA spokesman Naleeza Ebrahim.

Drivers also have to abide by operators' ruthlessly efficient system of accountability.

If a complaint is logged against them, they receive a call asking for their version of events the same day, or the very next.

Punishments meted out by ComfortDelGro, if they are in the wrong, range from demerit points, to the waiving of an undisclosed 'performance bonus', 'which is a rather significant amount given that taxi drivers' income has been affected by rising fuel prices', says Ms Tammy Tan.

And with plans for an industry-wide blacklist, drivers really need to be constantly on their guard.

They also have to attend a barrage of courses, ranging from SMRT's Customer Service Course introduced in March this year in time for the IMF/World Bank meetings, to the Singapore Taxi Academy's customised service quality courses.

These days, the onus of being Singapore's ambassadors - willingly or not - is thrust upon them. While some scoff at the role, others like Mr Ow feel good service is more than just upholding the company's, or the country's image.

It has endless potential for helping others.

'When I see disabled people waiting for cabs, I'll give them a discount or free ride. I'll help them up to their house,' he says.

'Sometimes, I meet women who start crying in my taxi, because their husbands are having affairs. I counsel them and say it's not the end of the world, pick yourself up and carry on.

'I believe that if you do good things, good things will happen to you. So I try my best.'

scabstermooch SG

Should independent operators be allowed? What is the advantage of the current system?

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One point though - I spoke to some taxi drivers and apparently, the increase in peak hour fares are hurting them. What is galling to me is the fact that taxi drivers get only 70cents out of the booking fee. The taxi coys are not helping

SGEMP SG

re: scabstermooch

Should not allow independent operators.

The reason being there would be no quality control if individuals are allowed as independent operators.

scabstermooch SG

Why would there not be? One simple soln would be for all new cabbies to have to take a national test of some sort + meet certain national requirements (eg No pts on Licence in the last 12 months/no previous suspensions/ at least p6 education/ not a sex offender/ etc).

Problem solved.

I do not think the argument that non-independent operators are accountable to the cab coy is a good argument. pass laws and all cabbies will then be accoutnable to the law. The situation now is really terrible from a consumer point of view - I want more cabs on the road.

Try hailing at cab at the chinatown area after 2130. There are -loads- of emplty cabs on the road but all of them are ignoring passengers to wait for people to call.

nightzip SG

Yes i second this!

Without independent operators or competition, the main operators can just do what they like and squeeze the taxi-drivers, high rental and set high taxi fees, where they DON'T care Mad cause they just collect rental only..all problems all pass to drivers only. Mad

Poolman SG

It's not a secret that the Liberationalised Taxi Industry is a absolutely failure , not much people or company benefit .

The only people benefit slightly is the taxi drivers . Can jump company like nobody business , this company no good , go another lor , no big deal .

The Garmen by liberalising the taxi industry , they washed hand totally to the taxi fare structure , taxi company can do what they like to set to the price structure , but they never imagine , the fare still more or less the same , they still follow ComfortDelgro's fare structure .

Nobody enjoys the competition , except taxi drivers , who reap in a few more extra benefit$ from the taxi companies . And this is not what the garmen wants initially , it a back-fire implementation .

Now taxi business is a cut-throat business between taxi companies , every taxi companies has a relatively high percentage of un-rented taxis , all because Singapore never has enough full-time taxi drivers , it's a small pool of full-time taxi drivers .

scabstermooch SG

What is the Singapore competition commission doing? Or do they just sit around twiddling their thumbs all day? Should they not at least launch an investigation?

Question

105090 SG

should our taxis follow many other countries style in quoting a price directly instead of meter fare?

say AMK to shenton way, $20 etc? then no more meter Mr. Green

scabstermooch SG

The problem is not competition. The problem is that there appears to be no real competition. They seem to be behaving like a cartel. Pricing structure etc are all the same!

carbikebus SG

The problems is that we are in SG almost everything are under controlled.Period!