How will cab fare hikes help?

A number of years ago, a taxi operator SMRT (previously known as TIBS) raise fairs by making their meters jump faster and bringing the midnight charge forward to 11:30pm.. It turned out commuters boycotted TIBS taxis. You could literally see folks standing at the side of the road trying to flag down cabs which were occupied. When a TIBS cab approached, folks will not attempt to flag them down. Even when TIBS drivers stopped and asked if they needed a cab, folks said “no”. Will the same happen for ComfortDelGro group of cabs?

Quoted from http://www.channelnewsasia.com/stories/singaporelocalnews/view/316918/1/.html:

Channelnewsasia.com

How will cab fare hikes help?
By Leong Wee Keat, TODAY | Posted: 12 December 2007 0900 hrs

Photos 1of 1

SMRT Taxi

Related News

• ComfortDelGro’s cab fare changes “fair and timely”: Taxi Operators’ Associations

• ComfortDelGro overhauls taxi fare structure

• Customers, cabbies voice concerns over likely cab fare hike

• Cabbies feel pinch, seek fare hike

SINGAPORE : A day after ComfortDelGro announced what some say is the biggest overhaul of the fare structure to date, other taxi companies have taken the first step to adjust their meters too.

Smart Taxis, with 800 vehicles, is aligning its new fare structure with that of the market leader. Besides raising meter fares, Smart said it would triple the city area surcharge and impose a 35-per-cent peak period premium to replace the flat surcharge.

The company’s managing director Johnny Harjantho told TODAY that ComfortDelGro’s new pricing structure, which will kick in next Monday, is “reasonable”. “If we do anything different or cheaper, we may not please our hirers or our commuters. It is best we retain a universal price.”

Smart, which notified the Public Transport Council (PTC) on Tuesday of its move, said the new fare structure will take effect on Christmas Eve.

SMRT, the second largest company here with 3,000 taxis, also notified the PTC about a fare adjustment. A SMRT spokesperson was tight-lipped about details, only saying that it would release them early next week.

Meanwhile, Premier’s managing director Lim Chong Boo said the operator was still considering and would make known its decision soon. New player Prime has said it would not raise fares for three months.

ComfortDelGro, which operates 15,000 taxis here, announced its new pricing structure on Monday designed to address both cabbies’ soaring operating costs and the dearth of taxis during peak hours. Passengers will pay between 10 and 49 per cent more.

The operator said this would “differentiate taxi services from public transport services like bus and rail which do not offer customers a point-to-point dedicated service”.

But observers TODAY spoke to are divided on whether a price increase alone would allow taxis to pull away from buses and trains as recognised “public” forms of transport.

Mr Han Songguang, a transport researcher at the National University of Singapore, argued that the fare adjustments are simply measures to manage consumer behaviour on the assumption that the demand is price-sensitive.

But, he noted, much of the demand for taxis is not so - tired white-collar workers going home after a long day’s work, people carrying bulky items or many shopping bags, or party-goers. And for them, taxis fill the need for a point-to-point form of public transport, which buses and trains do not provide.

Mr Cedric Foo, chairman of the Government Parliamentary Committee (GPC) for transport, called for public transport to be further improved - by keeping fares affordable while upping the level of service.

While the Government works on building a more extensive rail network, meanwhile, premium buses and express buses can help meet the need for better public transport coverage, Mr Foo added.

There are also concerns as to whether the new fare structure will benefit taxi drivers, who gripe about escalating operational costs.

With the general fare to increase by at least 10 per cent, there are marginal benefits for cabbies, said NUS don Lee Der-Hong - but they would benefit more if they switched to alternative fuels such as liquefied petroleum gas, to escape the hike in diesel prices, he argued.

Mr Ong Kian Min, deputy chairman of the transport GPC, postulated that if the 10-per-cent general increase deterred passengers from taking taxis, it might result in a glut of taxis during off-peak hours.

Hence, he suggested that taxi operators come up with different flag-down rates instead that could help taxi drivers garner more passengers during off-peak periods.

Some observers hoped that smaller operators could be “more creative” in their pricing strategies, instead of simply copying ComfortDelGro, to give commuters a choice.

But Mr Harjantho summed up the dilemma facing an operator with a small fleet: Lower the price, and a passenger may still not bother to wait for a Smart taxi to arrive; raise the flagdown fare but keep surcharges lower, and passengers may boycott Smart taxis.

“In this industry, ComfortDelGro is still the leader. There is no way we can adjust our fares according to what we want,” he said. - TODAY/il