Thursday, December 29, 2011

ST Online Forum: Consider a semi-regulated taxi system

Published in Straits Times Online Forum:

AFTER deregulation, the taxi service has become progressively worse over the years and there is much public unhappiness ('Cab fares: Deregulation hasn't improved service' by Mr Liew Chin Wen; 'Takings down, but...' by Ms Koh Lee Suan; and 'Fare confusion' by Dr Gil Simon Schneider; all last Saturday).

Taxi fares have become more complicated, confusing and expensive over the years. Taxis are not available at certain times of the day, not because of high demand but because of an artificially created shortage.
It is time to recognise the failure of deregulation and to move to a semi-regulated system.
I suggest that the Land Transport Authority (LTA) introduce a regulated basic taxi service that operates as follows:
- All taxis picking up passengers on the road or at taxi stands should have regulated fares.
- The regulated fares could be based on a fixed flag-down rate plus a fare based on distance, or a higher fare based on the trip time, to compensate the taxi driver for traffic congestion, for example 60 cents a km or 40 cents a minute, whichever is higher. Electronic Road Pricing (ERP) charges can continue to be added.
- There is no need for peak-hour surcharges, as the taxi driver is already compensated for time spent in slow-moving traffic.
- A centralised taxi booking system can be operated by a service provider appointed by the LTA to match taxi drivers and customers for a flat fee of $1.
- The fares can be reviewed at six-monthly intervals by a fare-setting body with the aim of matching supply and demand.
- Individual taxi drivers, as well as taxi companies, can apply for a licence to participate in this basic taxi service.
The taxi companies can continue to operate their special services, based on their terms, conditions and fares, but they would have to take bookings through telephone calls from customers who are aware that they are paying a higher rate for the non-basic service.
A mixed system with a regulated basic service, complemented by deregulated special services can best serve the needs of commuters and taxi drivers, and bring some order and simplicity to the current chaotic situation.
Tan Kin Lian


Monkey said...

I'm not sure taxi drivers are compensated by the slow traffic moving time because the same slow traffic are against them when trying to get to the next fare. so in one hour instead of being able to get 3-4 fares, they may only have 1 fare...

just my 2 cents

Tan Kin Lian said...

Hi Monkey
Under the proposal, the taxi driver gets the higher fare based on distance and time.

Suppose the journey is 30 km, the fare should be $18 but if the journey takes 1 hour, due to slow moving traffic, the fare should be $24. Anyway, this is just an example, so the actual rate of $0.60 per km and $0.40 per min will have to be tweaked.

Hiei said...

If taxi is a substitute to getting a car, then current price of taxi is relatively cheap.

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