Taxi Fare Hike

"Uncle, come this Monday, your taxi fare will increase a lot"

"Ya, loh, we cabbies have no say. Our company decides on everything without checking with us.

"30% increase is unjustifiable. Higher flagdown, higher metered rate, higher advance call booking fee, extended peak hours, including Saturday & holidays, so on and so forth. So confusing with so many surcharges and increases! Why?

"Our company says it wants to help us defray our rising costs of fuel and living. And also match increase demand of cabs with supply".

"If they really want to help you, they should reduce your taxi rental in the first place. Increasing fare will reduce ridership".

"Ya loh. Give them 6 months. They will increase my rental instead of reducing it. They will say that they are facing similar problem of rising costs like us. Like our government, they do unpleasant things slowly in stages.

"If your company is grappling with increase costs, it should detail how these costs increases cannot be matched by greater efficiency, productivity and innovation - rather than resort automatically to the price mechanism"

"These are very high sounding academic thinking. Do you think our company will bother to do it. They think only of getting all their taxis on the road to collect rental. They don't care whether there is over supply of taxi or not. Or whether there will be a reduced in ridership! At the end of the day, much of the fare increases will go to the pockets of my company, not me!

"Why have we reached to this stage of affairs?. Singapore has more taxis per person than most - if not all - developed cities. We have 5,000 cabs to every million people, versus 2,500 in Hong Kong, 1,500 in New York. Yet, commuters always complain of difficulties in getting a cab when they want it. In H.K. they could get a cab within 5 minutes anytime of the day. Why?

"True. While Singapore has one of the highest taxi-to-population ratios in the world, fares are among the cheapest and car prices among the stiffest. Demand at peak hours are always more than supply and cabbies often cherry pick during this period. This happens because fares are under-priced. Almost every person can afford to take taxis. A little increase in fare would remove those fringe taxi commuters and reduce demand. I think the current price revision is more palatable solution, though not elegant.

"Presently, it's very confusing with so many surcharges, especially for tourist. Why not dismantle all the clunky surcharges and simply raise the flag down and metered fare, like in Hong Kong?

"Well, using a simple fare structure alone won't solve the problem of an excess demand for cabs. When demand is more than supply, price would increase. Similarly, if supply is more than demand, price will drop. So it's a question of price."

"Why don't your company treble or quadruple fares to make cab a luxury like in New York or Tokyo?

"Oh, no. Such a brutal increase would come with an unbearable social and political costs. And it would immediately price out half a million cab commuters and make me jobless.

In conclusion, there is no easy way to fix cab conundrum. The system of surcharges is confusing and remains a second best alternative. I feel the impending revised cab fares are fairer and simpler. If you feel otherwise, you're most welcome to give your opinion and comments in this blog. No offense will be taken, I promise.

You may like to read comments from my favorite blogger at 
http://singaporemind.blogspot.com/2011/12/taxi-fare-hikes-and-what-is-wrong-with.html