In this sweltering heat of Kuala Lumpur, the last thing one would want to go through is a traffic standstill—more so if it is done on purpose. Recently, our taxi drivers drove the city temperature through the roof when their self-orchestrated ‘taxi protest’ over the use of ride-hailing mobile applications; such as Grab and Uber, brought the traffic along the city’s shopping-belt in Bukit Bintang to a halt.
If there is anything to be expected from the protest, public sympathy is surely bottom on the list.
Try tuning on the radio or flipping the pages of the news, it is not uncommon to hear customers being victimised from their poor service and rogue attitude. Issues such as overcharging and refusing to take passengers during peak hours are not new, neither is the government oblivious to the economic threat that Grab and Uber present to our taxi drivers. After all, it is true that ride-hailing applications are not competing on a level-playing field as the taxi drivers—who are themselves trapped in a web of broken taxi service system.
Some of the taxi drivers were reported to have said during the protest;
“If the authorities are not taking any actions to solve this threat against ‘their livelihood’, they may as well quit becoming taxi drivers and join Uber and Grab instead!”.
As contradictory as it may sound to be, a dose of empathy from a rationale mind will capture the underlying message that all they want is a fairer share of the consumer pie.
What has SPAD Done So Far?
I disagree with the Chairman of the Public Transport Commission (SPAD), Tan Sri Syed Hamid Albar, when he was quoted to say that “there are too many taxis for the Klang Valley’s population”.
For an area that has an estimated population of 7 million, it is only logical for competitors to be welcomed to our 37,000-strong public taxis.
The biggest stumbling block to the government’s taxi reform effort is its lack of commitment to solve the root of the problem, as well as SPAD’s inability to be in the shoes of the taxi drivers, the customers, and the regulators who issue out taxi licenses. The way SPAD has been operating is to offer solutions only to the symptoms of one aspect of consumerism; which is the accessibility to a good taxi service.
TEKS1M: A Solution Mismatch
As to date, the only notable reform that SPAD has initiated is the launch of the Teksi Rakyat 1Malaysia (TEKS1M), which is a mere facelift of taxis to Proton Exora from the current batch of outdated Proton models. Funnily so, the new batch of TEKS1Ms had collaborated with Uber during the previous Malaysia Day celebration to offer services to the ride-hailing application’s customers.
If SPAD and Uber can collaborate once for a special occasion, why can’t it be continued for it to be a special occasion for customers, everyday?
A Broken Public Taxi System
Many are not aware that a large majority of the taxi drivers have no ownership to their taxis. Taxis are leased by companies that are granted permits by the Road Transport Department (JPJ), and taxi drivers either have to pay a daily rental or a monthly lease fee.
Overcharging occurs when taxi drivers are not only expected to pay their daily rental obligations (which can be as high as RM100/day), but also to bear the costs of repair services, payment for the tests required to evaluate the road-worthiness of taxis, as well as operating costs—before being able to sustain their livelihood. The leasor companies also do not provide them with Employee Provident Fund (EPF) or Social Security Organisation (SOCSO) benefits.
It is easy for us to say from a customer’s standpoint that the easy way out to that problem is to stop refusing passengers and overcharge them in the first place!
Crazy how even taxis are discriminated based on ‘class’
However, it has to be understood that certain areas only allow taxis to pick up passengers from designated taxi lanes, which means that it might take up to an hour for a taxi driver to get a passenger. Adding salt to the wound, some commercial areas only allow taxis of a certain ‘class’, or of certain taxi companies to be on the designated lanes.
Beyond Klang Valley, taxi drivers are also not allowed to compete with those under the patronage of local taxi associations, whom members are obliged not to adopt the metered fare, but a fixed rate—which in return, gives them the access to be on the designated lane. This is prevalent at the more isolated KTM/LRT stations where ‘outsiders’ are chased away or threatened not to come back in order for their association members to monopolise the demands from passengers of that area.
On the other hand, taxi drivers are also concerned about the unprofitable return-journey; which can range from reasons like unfamiliarity with the area to get new passengers, low demands, return costs to the city centre, as well as their time spent in the traffic without a passenger.
Considering that taxi drivers still have to meet the bare minimum to cover the daily financial commitments, the whole set-up is not conducive for the taxi drivers to be encouraged to be honest and hardworking, even if the base fare is increased by multiple-folds.
Breaking the Herd Mentality
Our fast-changing ways of doing business means that service providers have to adapt to the changing nature of customers’ expectations. Only 5 years ago—when there were no alternatives to the traditional taxi system—there was no harm done even if the customers are not satisfied or victimised by the service of the taxi drivers. One might have to turn a blind eye and ride on the same taxi as options were limited.
But this is not the case anymore, nowadays.
Several taps on a mobile application—and a clean, properly-maintained, and comfortable car can arrive to the accuracy of your office’s entrance. It does not matter where you are at, what time it is, and where will your final destination will be—so long as there is an available ride nearby—be rest assured, you will have a comfortable and safe ride home.
This is what most taxi drivers are wary of from the threats of ride-hailing applications.
Drivers from Uber and Grab have the flexibility to move about, almost anywhere. Potential customers do not even have to go to designated taxi stands or stand by the roadside as the service offered is personalised to the customer’s own convenience. As the in-built application system utilises the Global Positioning System (GPS) tracking, both Uber and Grab base their business model on supply and demand, rather than the wait-and-see approach in a traditional taxi setting.
The embrace of technology essentially makes ride-hailing drivers more mobile and evenly distributed, unlike the approach of taxi drivers who are more focused on densed areas, such as shopping malls.
Taxis herding together like sheeps
It is no surprise then to see long lines of taxi drivers at LRT stations and the airports, counting their eggs before they are hatched. While ride-hailing drivers are able to optimise their fee:hour ratio, taxi drivers will have to wait longer and earn less—although both stakeholders are offering the same service.
With this service structure, both customers and drivers are assured of their bargaining chip. While the customers can have their service quality assured, the drivers are less dependent on each individual customer for an extra fee, as the simple measure of ‘the harder you work, the more you get’ is re-assuring enough.
It is A Win-Win Situation
Now that we have a solution to break the herd mentality, it is also important to ensure that the taxi drivers are not left idle from over-competition or an overcrowded of service providers. A saturated market will usually leave only one party as a winner while the other, a loser. This is why the pattern of the supply and demand needs to be closely observed to optimise the 37,000-strong taxi drivers that we have in Klang Valley.
It is undeniable that Klang Valley spans a population of at least 7 million.
But we have to bear in mind that the logistical nature of each of the populated area in Klang Valley differs from one to another. On top of that, most Klang Valley residents only work-and-play in Kuala Lumpur, but are residenced in the sub-urban areas. The reality on the ground is that while most of the passengers’ requests are from the city centre, this pattern is mostly active during the working hours, or on weekends where the city centre is most hectic.
The overcrowding of supply may happen as during certain period of the day, there are more taxis or ride-hailing drivers than the potential passengers are in the city centre!
Therefore, SPAD needs to come up with an incentive to encourage taxi drivers to go beyond the city centre to earn a living—without wasting much resources and time. It has been proven that having local associations to provide an exclusive service would only lead to monopoly and abuse.
The only forward then is to embrace the technology in order for the taxi drivers to extend their boundaries of service with the help of GPS tracking.
What Has Uber Done to Manage their Supply and Demand?
To compare, Uber has successfully managed its pool of drivers to cater to the changing patterns of passenger demands through their ‘surge pricing’ mechanism.
Where demands are high in a particular area, Uber would offer a higher price for whichever driver who can carry a passenger from within the ‘peak’ area, until the demand is balanced by the supply of service. Through this measure, it has managed to mobilise its already mobile drivers from Kajang to Shah Alam, Setapak to Bangsar, Wangsa Maju to Putrajaya—you name it, without a hassle.
The Reform Needs to Embrace Technology
As many other online-based applications, the gathering of data and the stability of the system to withhold the usages are what differentiating one provider to another.
Here is how SPAD can play its role effectively.
Rather than wasting resources to send enforcement officers to spy on rogue taxi drivers, SPAD should either integrate all taxi drivers into the available ride-hailing systems; such as Grab or Uber, or create its own ride-hailing platform as an alternative to available applications.
It is known that some taxi drivers would even cancel on their ride requests from Grab, for unknown reasons. Perhaps there are arrangements that taxi drivers would want to have been considered before it is imposed on them to use it.
SPAD Needs to Listen Better and Act Faster
It is also hoped for SPAD to streamline the Standard Operating Procedures (SOPs) for the leasor companies to accord minimum employee protection such as EPF and SOCSO, and for SPAD to have a stronger enforcement control over errant taxi drivers. If fines and revocation of taxi license cannot deter them, then find legal measures that can be more of a concern for the rogue taxi drivers.
On top of the use of technology as practiced by Uber and Grab, the most pertinent aspect to solving problems is to listen to various stakeholders and come up with a wholesome reform which addresses the root of the problems from bottoms-up.
If it is the individual permits that the taxi drivers are after, then start thinking of ways to make it less financially burdening.
If a fairer pricing mechanism that taxi leasors and drivers are chasing for, have a joint consultation for a both parties to have a win-win situation. They can even learn from Uber’s ‘driver incentive‘ mechanism if they wish to; which guarantees a base gross fare for drivers who carry passengers at least once an hour during peak hours in certain core areas of the city centre.
If it is the patronage of associations and unfair competition by large taxi companies that hinder opportunities, perhaps SPAD can also work its ways for the merger of numerous small-fry taxi companies for them to have a stronger leverage over intimidation and monopoly.
It is also not wrong for SPAD to adopt initiatives that have been done by countries like Singapore and the UK, or even from private companies such as Uber and Grab.
“Good artists copy, great artists steal.” – Pablo Picasso.