How can $1m help the Taxi industry?

LTA recently announced that it will be setting aside 1 million dollars to help the Taxi Industry. As we all know fewer people are taking Taxi lately due to the recession, high fares, H1N1 etc etc. I’m not going to debate on why we should be using taxpayers money to save an industry. A lot of people have already done.
But I can’t help but wonder, can the $1m help the Taxi industry? In his letter to ST Forum, Jeremy Yap, Group Director for LTA Vehicle & Transit Licensing, states 3 aims of $1m fund.

First, it aims to improve the service levels of taxi drivers, so as to enhance the overall delivery of service to commuters, by co-funding initiatives such as programmes on good service behaviours.
Second, it encourages the industry to do more to stimulate demand, by co-funding initiatives from the taxi companies for up to one-third of the cost of the promotional activities, but this will expressly exclude any direct subsidy of taxi fares.
Third, it serves to improve demand through improving convenience and accessibility for taxi commuters during major events like the Singapore Formula 1 Grand Prix and the Singapore River Hongbao, by supporting additional infrastructure facilities such as temporary taxi stands.

In short, that means training for Taxi drivers, marketing and building more Taxi Stands.
First question, do we need to give Taxi drivers more training? Training is good. It improves the service standard of Taxi drivers. We all heard of the poor service standards by some taxi drivers. But those are just black sheep. And besides, is poor service standard the reason behind the fall of taxi ridership? Answer is No. The service standards has been improving over the years, yet the ridership has been dropping lately. Service standard is not the reason behind the fall.
Next question, do we need more taxi stands? More taxi stands are good. Especially after the stupid ruling where taxi are not allowed to pick up or drop off passenger at the side of the main road in CBD. Speaking of that stupid ruling, I really think it should be abolished. For the uninitiated, Taxi drivers are only allowed to pick up or drop off passengers at Taxi Stand or building driveways in the CBD. The ruling is supposed to be for safety of passengers, taxi drivers and other road users. I’ve lost count of the number of times I see foreigners trying to flag for a taxi along the main road in CBD. I even walked up to some of them to tell them that they can only board a taxi at the Taxi Stand, which coincidentally is either empty or having long queues. We can built a few hundred more Taxi stands in Singapore, but they are useless if there is no Taxi. Have you ever tried waiting for a Cab at Ngee Ann City Taxi Stand? It’s a nightmare. Sometimes, the waiting time is enough for you to take a train from Orchard to any part of Singapore. So will building more Taxi Stand help the Taxi industry? No.
Last question, do we need to have marketing and promotion campaign for Taxi? I can tell you straight away that the answer is no. Everybody knows what is a taxi. Everyone knows how to flag for a taxi or call a taxi. There is no need to run a marketing campaign to promote taxi ridership. Marketing can be good for some business. But you don’t need to run a marketing campaign for taxi. Everyone knows what is it already. Just because I see my favorite celebrity taking a cab on television doesn’t makes me want to take Taxi. And promotion isn’t going to help much. Giving another trip free or free goodies is not going to encourage me to take a taxi.
The problem lies with the Taxi fare pricing, especially the ridiculous 35% peak hour surcharge. If LTA is really sincere about saving the Taxi industry, try lowering the taxi fares. With cheaper rates, people will start taking taxi again. But then, lowering the taxi fares will pose another problem. Taxi drivers might not earn enough to make a living. And the only solution to that will be reducing the Taxi rental. Then the taxi companies will complain since they are earning lesser now. But taxi companies are already earning a lot nowadays. Do you know that taxi rental per day is around $100? It is impossible for the Taxi companies to reduce the rental because that will affect their profit. But what if LTA reduce the tax and license fee on taxi companies to cushion the loss in profit? Hmmm…. Maybe that might work.
Honestly, I’m not against LTA using $1m to help the Taxi industry. If it is a good method, I won’t even mind if they spend more money on it. But after reading the 3 aims of the $1m fund, I can’t help but think that LTA is going to throw the taxpayer money into the ocean without getting any results in return.
Come to think of it, there must be other ways to help the Taxi industry other than the one I’ve suggested. If you have any, feel free to throw them in the comment box. Hopefully someone from LTA will pick it up and put that $1m into better use.


  1. Totally agree, what we need is lower taxi fares – from reducing the ridiculous 35% surcharge to abolishing the ridiculous $3 CDB charge. It’s really unfair for those of us working in the CDB area. Why should I pay extra $3 when others who work at let’s say, Kallang don’t have to? And people who work in the CDB don’t necessarily earn more. There are admin and retail assistants in the CDB too!
    It’s all a case of simple economics. Supply, demand and price. Lower the price and you’ll have an increase in demand. Increase in demand will increase revenue for taxi drivers. Of course temporarily reducing tax on the taxi companies will help as well.
    Other things that can be done to increase efficiency as well like staggering shift changes. There are pockets of time where finding a cab is almost impossible because they’re all changing shifts. With more taxis available round the clock, they may be able to pick up passengers they weren’t able to before.
    And of course, regulating the number of taxis may also be helpful too – to ensure that supply is equilibrium of demand. Perhaps more taxis during peak periods and less during low periods. This probably requires a change in the taxi industry standards – a change that the recession is demanding right now.
    .-= Ivy´s last blog ..I am Predictably Irrational =-.

  2. I asked Taxi drivers before and was told that the peak hour surcharge would stay as it is a form of crowd control.
    You see the cab companies had received complaints that during peak hours working Singaporeans are not able to hail a cab as there are none in sight. The reasons:
    1) the taxi drivers are sleeping
    2) the taxis are hailed by students late for school
    Thus with the 35% surchage, the taxi drivers have a ($$$) reason to wake up early as picking up 1 or 2 passengers would cover their rentals for the day plus the poor students could not afford to take taxis too often. Thus working Singaporeans will be able to hail their taxis and arrive at work on time albeits at a much higher cost.
    Actually, other than the peak hours period, there are way too much taxis on the road and the taxi drivers end up just plying the road and polluting the air.
    Perhaps the taxi company can have off peak taxi rentals just like our off peak cars and charge lower rentals. During off peak hours, the meter can be locked so the taxi drivers cannot cheat.

  3. Anyone with a rational mind would know that the measures they hope to take with this $1M is NOT going help the Taxi industry from gaining more rides. So is there another reason for this?
    Will the contract for training the cabbies be given to the Director’s friend, relative or company with a PAP member who is a board member?
    Will the contract for marketing the taxi industry be given to the Director’s friend, relative or company with a PAP member who is a board member?
    Will the contract for building the new taxi stands be given to the Director’s friend, relative or company with a PAP member who is a board member?
    Recession is affecting companies big time, so is this a covert way or helping pass money around big time?

  4. “Anyone with a rational mind would know that the measures they hope to take with this $1M is NOT going help the Taxi industry from gaining more rides. So is there another reason for this?”
    I concur with your point. The $1M is not going to help the Taxi drivers. I think it is going to help the taxi companies and the media companies, example, SPH, MediaCorp & etc…

  5. A taxi driver told me he wished he can lower or remove the more than 30% surcharge if he can. Unfortunately he couldn’t.
    He said government will not approve. He said this surcharge was created to help divert more passengers away from taxi to mrts or else there’ll be more white elephants being put up at the new circle line stations.
    I think he makes sense in certain ways. If the surcharge was to be introduced nearing or after circle lines are created, then all hell will break loose. Like Temashit holdings always say, they look at long term. I think the surcharge was for long term…
    Need to check who actually created the surcharge thingie in the first place. If it’s the taxi companies themselves, then his theory doesnt make sense anymore…
    Well.. well..

  6. True enough,the aims seemed stupid after being analysed by dk.It leaves many of us to wonder what were the people in LTA thinking when they made the decision…

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