Thursday, March 19, 2015

Plight of the cab drivers

If the CPI was taken as indicator and pro-rata annual rate of 2.5% assumed, cost of living may have  gone up in the last 5 years at a compounded rate of 13-15%. Fuel up, maintenance of car up, and tyres and spare parts up but taxi fare remain the same for the poor cab drivers.

They are faced with the cut throat hire purchase repayment of RM55 a day or RM120 a day for airport taxi to be paid to the oligopoly of taxi companies. These companies use the hundreds or thousands of operating license available to them to top up over the interest rate Banks charged them.

Operating license are issued to companies or individuals but to secure an individual operating license, the waiting list could take years, requirement stringent and high level connection needed. Most operate under companies.

As a regular taxi user, we emphatise with cab drivers. Half the time, they had to first work to pay the companies before making the money to feed their family. Adding to their woes, there are too many cabs in the city, encroachment into their area of business, rent seekers and syndicate and gangsterism arising from poor enforcement.

Most taxi drivers are basically living within the poverty level. So When Malay Mail Online leaked the news of possible cab fare increase on Tuesday [read here], we agree. Its long over due.

It is only a matter of how much. Too much and it will beyond public affordability. Consumer could change their transportation mode. Too little, it is uneconomical. 

Fair increase

The newsbreak claimed the increase will be as much as 40% and taxi driver association had responded to say it is fair [read MMO here]. It could be them leaking the information since SPAD official said fare review is still ongoing and no final decision made [read The Star here].

Anyway, The Star yesterday published a supportive letter from a reader, YS Chan. It has few facts worthy of public consideration and we reproduce the letter below:
Published: Wednesday March 18, 2015 MYT 12:00:00 AM
Updated: Wednesday March 18, 2015 MYT 8:14:53 AM

SPAD must not delay taxi fare hike

IN the last quarter of 2013, the Land Public Transport Commission (SPAD) held 15 sessions to review taxi fares in Kuala Lumpur, Penang, Johor Baru and Kuala Terengganu.

During the launch on Oct 18, SPAD chairman Tan Sri Syed Hamid Albar was hopeful that new fares would be announced in the first quarter of 2014.

A 38-page bookletntitled “Taxi Fare Review – Interaction Paper” was distributed. It was clear that a comprehensive study had been conducted and SPAD was finetuning it.

SPAD chief executive officer Mohd Nur Ismal Mohamed Kamal said:“Since 2009, fuel expenses have gone up by 17%, maintenance by 20% to 25%, tyres by 25% to 30%, and battery by 30% to 35%. Also, cost of living has gone up by around 2.5% each year until now.”

In April 2014, SPAD announced that budget and executive taxis with permits expiring from May can continue operations until October.

But from November onwards, all new metered taxis will be migrated to Teksi 1Malaysia (TEKS1M) using Proton Exora as budget taxis.

The plan was to have 2,404 old taxis migrated to TEKS1M by the end of 2014, joining the 1,000 introduced earlier under a one-off scheme where 697 were allocated for the Klang Valley, 251 in Johor and 52 in Penang.

But the freeze in fare hike has impacted the taxi industry as the number of TEKS1M seems to be dwindling instead of increasing.

Many TEKS1Ms were repossessed when drivers defaulted in hire-purchase loans and taxi companies had stocked up on non-Exora ­models before the deadline as cabbies preferred cheaper models.

The higher costs in operating TEKS1Ms has taken a toll. Some drivers gave up even though they no longer have to rent the permit from a taxi company or another individual.

As there will never be a perfect time to announce fare increase, it might as well be sooner than later, and always better to tackle inherent problems early than allowing them to fester.

SPAD is certainly in an unenviable position as it will be damned if it does and damned if it doesn’t.

And one of the biggest critics of a fare hike will come from the cabbies themselves as they are certain to suffer a loss of income when locals shun using taxis for a while.

However, a fare increase is the much-needed shot in the arm for the ailing taxi industry to move forward.

Under the Government Transformation Plan (GTP), the milestone for 2015 is to have 7,500 “Asean best in class taxi” on the road.

It would be a reality had everything gone according to plan, such as announcing the fare increase a year ago. No doubt, consumer associations are duty bound to protest any increase in prices but those in the focus group session agreed that fares cannot be below cost but wish to see taxi services improved.

The man in the street is likely to insist that quality of service be raised first before allowing for a fare increase; a chicken and egg situation that leads nowhere.

In 2007, I had proposed that budget taxi fares be increased from 66 sen per km to RM1 and from RM8 per hour to RM12.

In 2009, the fares were increased to 87 sen per km and RM17.14 per hour, a rise of 30% and 114% respectively.

At a consumer focus group discussion, I proposed that fares be increased to RM1.25 per km and RM24 per hour, a rise of 44% and 40% respectively, to ensure the rates are sustainable over the next few years.

However, for executive taxi drivers switching to TEKS1M, it would be a bitter pill to swallow after collecting RM2 per km and more than RM34 per hour over a seven-year period, with some using Naza Citra that cost a little more than the Exora.

But transforming our taxi industry is not a popularity game and no decision can make all parties happy.

In such a scenario, it takes true leadership to lift the industry out of the quagmire and the first concrete step is to have taxi fares that are fair to both drivers and passengers.

Kuala Lumpur
The popularity game can only be expected. When the discussion of cab fare increase surface [read Sin Chew in January here], Rafizi was believed to express disagreement and asked the government to think about the consumers.

Good that he wants to play politics on everything including cab drivers welfare. In the last general election, Dato Seri Anwar Ibrahim woed and receive support from cab drivers. They were even employed to be Pakatan Rakyat campaigners and propagandist. 

The government could now win them over.

Unsustainable low fare

The consumers have to be fair or the phenomenon of defaulting 1TEKSIM owners from unsustainable income will continue and the whole cab system in Kuala Lumpur could collapsed.

As it is, cab drivers are struggling to survive with so many cabs around. This could thwart any attempt to improve and upgrade the cab service in Klang Valley.

Our sample survey of cab drivers in the city puts their average income at RM2,000 a month. These drivers have to work an average of 10 hours a day without rest day to achieve such an income. It means they qualify for BR1M.

The nationwide average could be as low as RM800 when rural kereta sewa between towns are taken into account.

SPAD may deny such claim regularly made by ca drivers. Their  official stance is that there had not been any new operating licenses issued for quite sometime. When PM launched the 1TEKSIM program before, it was the renewal and reassigning the operating licenses of a particular cab company.  

It is believed that there are more than 35,000 cab operators in Klang Valley today. THy represent the bulk of 60,000 cab operators nationwide. It wasn't too long ago that cab drivers were saying the figure for Klang Valley was around 20,000. 

Not only that, cab drivers are facing encroachment into their traditional area of business. Cabs are being pushed to operate around train stations as city centre are too congested and trains are becoming a more popular mode of public transportation.

Train has a bigger capacity and is a faster mode of public transportation and the future plan will be for more trains. Road system cannot cope with the increase in congestions even in neighbourhood. Time will only get tougher for cab drivers. 

There is also the competition from new variety of cab licenses like limousine services, blue executive taxi and upcoming uber cab.

In places like KL Sentral, express bus stations, hotels, KL bird park, etc., cabs are not allowed to pick passengers unless they accept payments in the form of tickets issued by them. Cab drivers will submit the ticket a day or two later for payment.

The purpose is to kill off ticket touts but it is rent seeking and taking a ride on cabs as tickets are issued at 20 to 30% higher than metered rate.     

In places like Bukit Bintang and KLCC, there are taxi driver syndicates that controls the area to prey on unsuspecting tourist. They do not abide to the regulation to use the meter and charge exorbitant fix rates. Other taxi picking up passengers there are roughed up or get their car smashed. 

It is only in major urban areas like Klang Valley, Penang, and Johor Baru could flag down cab service operate.

In the rural area, the old kereta sewa service at taxi stands are no more popular. Express bus system and inter-town bus service are more frequent thus it is hard to fill up their cab with passengers. 


Consumers are expected to question the public transportation to warrant such increases. The service level, extensiveness, consumer options, safety, enforcement and other issues on public transportion will take centre stage in the media.

SPAD have often been saying that the low fare is not sustainable and it is unfair to be tough on the cab drivers. For cab fare to be raised, SPAD must have something up their sleeve to implement or enforce immediately.

Public is at a highly sensitive mode when it comes to any form of price increase. They will not tolerate fare increase without any increase in quality of service and enforcement.  

The plan to increase cab fare was supposed to be done last year but believed to be postphoned due to sensitivity to the Kelantan flood disaster. Unfortunately it is now too close to the commencement of GST.

As Chairman, Tan Sri Syed Hamid will have to face to the public on this.

When reminded of his days as Foreign Minister, Defense Minister and Law Minister, public relation was never his strength. He could get into the most politically incorrect situation when faced with a barrage of attack.

Those critics disagreeing with too many Ministerial status accorded to political retirees would raise this issue if he fails to handle it.

By the way, is he Chairman or CEO? Just asking ...


Anonymous said...

Whenever I travel to Singapore, it is such a refreshing change to travel in taxi cabs there.

Clean, spacious vehicles adhering strictly to the meter. Drivers who are presentable in attire and behaviour.

Why can't we have the same thing in Malaysia?

There's no shortage of regulations for the taxi cab industry in the country.

It is just that the authorities have been doing an atrocious job of enforcing these regulations.

And, of course, issues of race, licences and quotas come into play.

Get the politicians and vested interests out of the taxi cab business in Malaysia!

Anonymous said...

No proper planning. What is the use of SPAD? Who do the cabbies appeal to most and who should be targetted? Simple questions are not being aswered yet the symptoms are treated? Abolish the AP for cars, revoke all licenses from individuals and start clean. Thousands of license are owned by one individual who quietly collect rents? This is what the NEP has come about. Those that were there in the early days are still making a fortune at the expense of the nation. Increasing the base fare is a stupid move, spad is stupid. Shed hamed albob is stupid.

Anonymous said...

if race and quota does not come in the picture, the chinese would bribe their way and dominate the industry prevalently happened everywhere.

Anonymous said...

Anonymous 6.20pm

"The Chinese would bribe their way"

If the Chinese have their way, there will be no bribe happening as in Singapore, Taiwan, Hong Kong and now even in China. It's only the Malays who need bribes to survive.

Anonymous said...

#6:20 PM

And how is that a problem?

I have seen Chinese, Malay and Indian taxi drivers in Singapore. They all have the same complaints, but they mostly work hard to take care of their families.

Are you saying that the authorities in Malaysia are powerless to prevent "bribery" and "corruption"?

Why blame a particular race?

Unless you can't compete, that is....

Anonymous said...

What do you expect from a retired old man to lead SPAD? Its easy job to increase fares. If that's the case you monkey also you can get the job done. Increase in fares will make the cab-drivers more lazy. Do you know how many households will be impacted by the school bus fare hike, given 3.0 million + primary school going children? I just can't understand why government must go on keeping old politicians in the government agencies and commission. What more can old goats contribute? The government need fresh and younger breed to innovate new models to achieve faster changes. Also, please don't also give to old-and-about-to-retire government officers.

Anonymous said...

Having too many cabs in the city is one thing, but getting one when you need it is also a problem to city dwellers. Even using apps such as MyTeksi does not help if all the taxi drivers within the vicinity reject our requests. These has happened many times. Calling the taxi operators centralized number will result in the reply that none of our taxis is available. Sometimes you have to indicate that you are willing to pay more than the metered amount before a taxi is assigned to you.

Anonymous said...

3:56 PM,

It is shallow minded to compare Malaysia with Singapore. Singapore is only 600 sq miles, racistly made 72% Chinese (many of whom have started complaining though they didn't have much freedom when in Mainland China), ruled by the Iron Hand since Lee Kuan Yew days.

You try to be funny in Singapore, they'd sue you to bankruptcy if they cannot get you under their criminal laws. Even their Opposition MPs kena, at one time only 2 left in Parliament.

And you think no atrocious job of enforcing regulations in Singapore? Think again.

And nonsense of you talking of race, licences and quotas issues. The most racist are the Singapore government - look at the number of Chinese they imported until there are 72% Chinese there.

Anonymous said...

7:19 PM,

"Unless you can't compete, that is...." -

You are making fun of the Malays, aren't you?

The problem with blokes like you and the DAP is that you don't like History, opposed History being taught in schools, because you don't want to know that your own history is so shameful and you don't want your children and grandchildren to know about them.

China has over 3,000 years of history, so huge a country, the largest population in the world for so long, yet got conquered and ruled by the Mongols for 80 years in the 13th Century, invaded and ruled by the Manchurians for several hundred years until the 20th Century, then bullied by the Japanese, the Europeans until recently. Heck, Hong Kong was returned to China only in 1990.

China was a sick country economically for so long that it attracted communism, became worse under Mao Zedong, treated by the West as a pariah, and became strong economically only in the last few decades.

So, what the hell are you implying
Malays cannot compete?

Anonymous said...

7:19 PM,

Do you know that the Chinese in Malaysia are practically all descended from those who came from South China?

That the South Chinese were regarded by the Manchu Emperors as backward compared to the northern Chinese and were given affirmative treatment like quotas in the Civil Service of China?

If you do, then why are you implying Malays cannot compete? If you don't, read up the history of the Chinese.

Anonymous said...

7:19 PM,

Do know that you all in Malaysia originated from South China. And that the South Chinese are recorded in history books as originally non-Chinese but were hill tribes, called Miao etc? That Professor CP Fitzgerald in his book on the history of China said you all are descended from the hill tribes one way or another.

So, when you next want to imply you are better than others and the Malays, remember about your origins, as written by Professors of history, like below:

You people keep making fun of the Malays, mamaks, etc, what about you Chinese? What's the equivalent to call you all also having mixed blood? Now, now, don't say you people are pure Chinese.

Here is what Professor C.P. Fitzgerald says in his book, "A Short Cultural History of China" (600+ pages) - he lived in China for 5 years to research and gather material for that book:

The phrase "origin of the Chinese people" is in itself misleading.

1. Chinese culture took root in the plains of Manchuria, a foreign country until after World War II

2. The northern provinces “have always to some degree been mixed with peoples from the Mongolian steppes". (Hence they are also referred to as the Mongoloid race).

3. The southern and central provinces of China were, before the northerners moved southwards, "covered" by non-Chinese, the Miao, small in size and who the Chinese were contemptuous of.

4. The south was occupied by "aboriginal tribes which once occupied the whole of south China". The ancestors of most of the migrants to Malaya/ sia came from the south. The Professor said, "A large proportion of the population of the south calling itself 'Chinese' is in fact descended from one or other of the aboriginal races" - page 6. “The southern people were then treated (by the northerners) as barbarous” – pg 32. Even in modern times, in Yunnan and Kueichou, hill tribesmen number half the population.

The southerners comprise the following major groups:

a. Fukienese (Hokkien), "a separate stock, mixed with immigrants from the north and the Yangtze Valley" and speaking "a peculiar dialect".

b. Cantonese, also speak a somewhat alien language, a form of old Chinese - the south was colonized by the northerners, colonization completed in the 7th Century - some 800 years after China was formed as a political entity by Chin Shih Huang Di.

c. Hakkas, of Kuantung province, known as "guest families" - they speak a peculiar dialect, despised by the Cantonese and do not inter marry. These people were said to have come from the north, running away from frequent Mongol invasions that culminated in the conquest of China by Genghis Khan in the 13th Century.

Another Professor, Albert Kolb, also pointed out in his book, “East Asia”, 1971,

“Chinese culture cannot be thought of as originally Chinese because the Chinese themselves emerged gradually as a blend of many races and peoples”. (Pg 26).

Remember, the Professor said, “A large proportion of the population of the south (where your ancestors came from) calling itself ‘Chinese’ is in fact descended from one or other of the aboriginal races.” So, if any of you are referred to as descendants of the Miao (who are aborigines and non-Chinese), or other aborigines or hill tribes of south China, don't blame me, I'm just a messenger of the news. You can't also blame Professor Fitzgerald any more because he died some years ago.

So, how about we refrain from racial profiling and name calling, ha? No more implying Malays cannot compete and the like. More can be said of your kind but suffice for now.

Anonymous said...

And your point being what?

Do you see Singaporean Malays and Indians legging it wholesale to come and live and work in Malaysia?

Au contraire, brudder.

But there are plenty of Malaysian Malays who cari makan daily in "racist" Singapore.

Where got logic one, that?

Anonymous said...

Yet, see where China is now....

Making waves in the South China Sea. With only the US 7th Fleet standing in the way of China's domination of regional maritime routes.

Think that's funny. Go read the commentaries in the regional and international media instead of quoting from out-of-date textbooks!

Btw, how do you feel about Chinese investors and investments being welcomed in a certain southern state in the Peninsula?

Anonymous said...

The World Competitiveness Index sums it up nicely.

How many "hudud" economies/countries are there in the top 10 or top 20 rankings?

And if you are talking competition, look at where Malaysia's education system is ranked.

And, for laughs, ask yourself why KLIA is not among the world's top 10 airports (as per the latest Skytrax rankings)?

Who manages KLIA? Against who manages Singapore Changi Airport, hmm?

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