So it looks like nothing is standing in the
way of taxi companies imposing their version of "surge pricing" on
customers.
Last Friday, the Public Transport Council (PTC) and the
Land Transport Authority (LTA) issued a statement saying they had
"no objections" to the proposals by taxi companies to impose what
they termed "dynamic pricing".
Surge pricing, a system used by private car-sharing
apps such as Uber and Grab, adjusts fares according to passenger
demand in a particular area at a particular time.
Taxi companies had applied to the PTC to be allowed to
introduce such fare pricing on bookings made on mobile apps.
Uber and GrabCar have, in recent years, provided real
competition to cab companies, with media reports of many un-rented
cabs sitting around.
There was hope that, if nothing else, this competition
will finally drive cab companies to provide better service to
customers and better welfare for their drivers too.
I find it rather ironic that of all the things to learn
from the likes of Uber and Grab, the cab companies have chosen to
copy their surge pricing.
After all, surge pricing is probably the one thing that
commuters hate most about these apps.
Just think back to July 2015, when two of the main MRT
lines - the North-South and East-West lines - had a major breakdown
that lasted for 3½ hours.
Uber implemented surge pricing of up to five times the
usual fare, prompting a huge outcry online among frustrated
commuters.
Within an hour of the surge, Uber readjusted fares to
remove the surge mechanism.
Strangely enough, the largest cab company here,
ComfortDelgro, said after the PTC's and LTA's okay that it will not
be introducing surge pricing. Instead, it will introduce a flat
fare based on a metered-fare structure.
Uber and Grab say they use surge pricing to encourage
more drivers to get out on the road when demand is high.
The reverse will also then be applicable - that when
there is no surge pricing, fewer drivers are out picking up
rides.
Uber and Grab can get away with this, fairly or
unfairly, because they are not seen as the mainstays in the
business like how cabs are viewed.
But if cab companies introduce surge pricing too, would
taxis still ply the roads for a flag-down customer who will
probably be paying a lower fare?
Would people in Orchard Road on a Friday night be able
to get a ride back home without paying ridiculously high
prices?
And would taxi companies be losing the very edge they
currently hold over Uber and Grab by introducing dynamic
pricing?
When I need a ride, what I usually do is check Uber and
Grab to see how high their surge is.
If I feel the fare is unreasonable, I will either wait
for it to go down or take a GrabTaxi instead.
But if all parties - Uber, Grab and taxis - are
charging surged fares, which will I go for?
I'm pretty sure it's not the ones with the grumpy uncle
behind the wheel.
TNP
love the last line 