http://newpaper.asia1.com.sg/news/story/0,4136,194907,00.html?
How to help cabbies: Cut fares or reduce rent?
By Lediati Tan
March 07, 2009
WAITING GAME: Taxi ridership and drivers' income have both been falling. TNP PICTURE: JONATHAN CHOO
ON one side of the fence, you have the taxi passengers. Lower the fares and more will take cabs, they say.
On the other side are the taxi drivers. Don't cut fares. Reduce the rent instead if you want to help us, they tell the taxi operators.
Several letters have been published in The Straits Times recently about whether lowering fares or rent would help boost the declining earnings of taxi drivers during the economic downturn.
Taxi ridership fell from 11.3 million rides in 2007 to 10.9 million rides last year.
In January, the Land Transport Authority (LTA) said taxi drivers' income has been falling in tandem with a steadily declining taxi ridership since last August.
But Associate Professor Lee Der-Horng, a transport researcher at the National University of Singapore, said lowering fares would not help taxi drivers.
'Based on my observations, even if we cut taxi fares, it doesn't mean it will attract more passengers,' he said.
Simplify fare system?
But, he felt that a little fine-tuning of the fare system could be carried out if the taxi operators were willing to do so.
'It is an opportunity for companies to look at the fare system, and have a more simplified one,' he said.
'The general expectation is that by simplifying the surcharges, there might be room to bring down the fare slightly.'
The taxi operators are passing on their savings from the Government's road tax rebates, announced in this year's Budget, to their drivers.
ComfortDelGro, the largest of them, has said it will pass on the entire savings of about $4.6 million to its drivers starting from this month.
SMRT Taxis gave each of its hirers a one-time cash payout of $306 on 28 Feb.
Prime Taxis is giving its drivers $25 a month for a year. And from July, Smart Automobile will put $40 a month into its drivers' Medisave accounts, while Premier Taxis and Trans-Cab said they will be giving out cash rebates.
But Prof Lee thinks the operators can do more. 'If taxi drivers are the target audience, then cutting taxi rent is probably what we should consider,' he said.
'I believe companies are keen, but whether they are able to do so depends on their resources.'
Analyst Lim Jit Soon of Nomura Singapore said rental rebates would be a more feasible option. 'Operators would prefer giving rebates to drivers. It's more difficult to raise rent after cutting it,' he said.
On top of road tax rebates, cabbies are also getting other forms of assistance from taxi companies. SMRT Taxis gives cash bonuses, rent-free days, diesel subsidies and rebates amounting to more than $10 million a year.
ComfortDelGro spokesman Tammy Tan said the company offers its drivers an enhanced benefits package - amounting to $68 million in 2008 - which includes no claim bonus, loyalty incentive, rent-free days, diesel at subsidised rates and an ERP reimbursement scheme.
Dr Paul Barter, an urban transport policy expert from the Lee Kuan Yew School of Public Policy, believes taxi drivers are caught between a rock and a hard place, as it is unlikely that either taxi rent or fares would be lowered.
If operators have too many taxis that are not hired out, they might be more likely to give better rental rates to attract drivers, he said.
But in a recession, more unemployed people will turn to driving taxis for a living, so the taxi companies may end up with many drivers but too few taxis.
So, the companies may not be compelled to give better rental rates.
Dr Barter said: 'Taxi companies might be under some moral pressure, but there is no particular reason for them to do so.'
He added: 'The big problem is not taxi fares but too many taxi drivers.'
There are about 24,000 taxis registered with LTA.
'The situation is a bit grim for taxi drivers,' he said. 'They are in a very bad position and I feel sorry for them.'
Additional reporting by Joanna Hor and Audrey Tan, newsroom interns.
How to help cabbies: Cut fares or reduce rent?
By Lediati Tan
March 07, 2009
WAITING GAME: Taxi ridership and drivers' income have both been falling. TNP PICTURE: JONATHAN CHOO
ON one side of the fence, you have the taxi passengers. Lower the fares and more will take cabs, they say.
On the other side are the taxi drivers. Don't cut fares. Reduce the rent instead if you want to help us, they tell the taxi operators.
Several letters have been published in The Straits Times recently about whether lowering fares or rent would help boost the declining earnings of taxi drivers during the economic downturn.
Taxi ridership fell from 11.3 million rides in 2007 to 10.9 million rides last year.
In January, the Land Transport Authority (LTA) said taxi drivers' income has been falling in tandem with a steadily declining taxi ridership since last August.
But Associate Professor Lee Der-Horng, a transport researcher at the National University of Singapore, said lowering fares would not help taxi drivers.
'Based on my observations, even if we cut taxi fares, it doesn't mean it will attract more passengers,' he said.
Simplify fare system?
But, he felt that a little fine-tuning of the fare system could be carried out if the taxi operators were willing to do so.
'It is an opportunity for companies to look at the fare system, and have a more simplified one,' he said.
'The general expectation is that by simplifying the surcharges, there might be room to bring down the fare slightly.'
The taxi operators are passing on their savings from the Government's road tax rebates, announced in this year's Budget, to their drivers.
ComfortDelGro, the largest of them, has said it will pass on the entire savings of about $4.6 million to its drivers starting from this month.
SMRT Taxis gave each of its hirers a one-time cash payout of $306 on 28 Feb.
Prime Taxis is giving its drivers $25 a month for a year. And from July, Smart Automobile will put $40 a month into its drivers' Medisave accounts, while Premier Taxis and Trans-Cab said they will be giving out cash rebates.
But Prof Lee thinks the operators can do more. 'If taxi drivers are the target audience, then cutting taxi rent is probably what we should consider,' he said.
'I believe companies are keen, but whether they are able to do so depends on their resources.'
Analyst Lim Jit Soon of Nomura Singapore said rental rebates would be a more feasible option. 'Operators would prefer giving rebates to drivers. It's more difficult to raise rent after cutting it,' he said.
On top of road tax rebates, cabbies are also getting other forms of assistance from taxi companies. SMRT Taxis gives cash bonuses, rent-free days, diesel subsidies and rebates amounting to more than $10 million a year.
ComfortDelGro spokesman Tammy Tan said the company offers its drivers an enhanced benefits package - amounting to $68 million in 2008 - which includes no claim bonus, loyalty incentive, rent-free days, diesel at subsidised rates and an ERP reimbursement scheme.
Dr Paul Barter, an urban transport policy expert from the Lee Kuan Yew School of Public Policy, believes taxi drivers are caught between a rock and a hard place, as it is unlikely that either taxi rent or fares would be lowered.
If operators have too many taxis that are not hired out, they might be more likely to give better rental rates to attract drivers, he said.
But in a recession, more unemployed people will turn to driving taxis for a living, so the taxi companies may end up with many drivers but too few taxis.
So, the companies may not be compelled to give better rental rates.
Dr Barter said: 'Taxi companies might be under some moral pressure, but there is no particular reason for them to do so.'
He added: 'The big problem is not taxi fares but too many taxi drivers.'
There are about 24,000 taxis registered with LTA.
'The situation is a bit grim for taxi drivers,' he said. 'They are in a very bad position and I feel sorry for them.'
Additional reporting by Joanna Hor and Audrey Tan, newsroom interns.
