Friday, December 23, 2011

Removing peak hour surcharge

The regulators allowed taxi companies to levy surcharge during peak hours - the reasoning is that the hire fares will encourage more taxi drivers to come forward to pick up passengers. But this has an unintended consequence - many taxi drivers are not available during the short period before the surcharge come into effect, creating an artificial shortage.

In other cities, there is no peak hour surcharge, so they do not have this artificial shortage. Perhaps the taxi drivers are already compensated during the peak hours based on travelling time, in addition to distance. If they are caught in a slow moving traffic, they will get additional fare based on the time.

Perhaps this is a new way to fix the taxi fares - based on distance and travelling time. If the fare is low - where the taxi is stuck in congestion, the taxi driver can get an additional fare based on the time spent. For example, the fare can be $0.60 per km or $0.40 per min, whichever is higher. If the trip is 15 km and took 20 min, the fare is the distanced based fare of $9 (as it is higher than the time based fare of $8) plus a flag down fare. In normal circumstances, the distance based fare is more than adequate, so the time based fare does not need to come in.

I believe that this fare system may be easier to understand and can compensate the taxi driver during peak hours when the traffic is slow.


5 comments:

  1. That's too complicated. In my country, Bulgaria, taxis charge per kilometer when the vehicle is moving and when standing still, for instance in a traffic jam, there is another rate. In my opinion, this is a better fare type than what you proposed.
    Cheers!

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  2. I believe there is already a surcharge for every 30s of waiting.

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  3. Hi ssvv
    Your system is workable and so is my system. Both are workable. I think that my system is clear and transparent to passengers, and do not charge the commuters when the taxi stops at the traffic light. Furthermore, if the taxi is moving and very slow, due to congestion, the taxi driver is compensated under my system, but may not get the extra under the Bulgarian system.

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  4. Hi siauderman,
    I think that the "waiting" is for the customer to do something and come back. It may not be the same as being stuck in a traffic jam, or moving slowing in a jam. But, I could be mistaken. Can someone clarify?

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  5. as a cab driver myself for the past 4 years and in my humble opinion, i saw the reason for surcharges at certain timing is to entice the drivers to pick passengers in the busier area like CBD. also, if cab booking fees are reduced like what you mention, it will be unappealing for the drivers to take booking.
    but somehow, in recent fare raise by comfort, there are still loopholes for drivers to act otherwise then going accordingly to what comfort wish for.:)

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