Entrepreneur Development and the Taxi Conundrum

ARCHIVES 2010

By admin-s On Jul 30, 2010

The government over the years have issued thousands upon thousands of taxi permits both to individuals and to certain corporations who, despite their insistence of independence, are allegedly politically linked to certain leaders and individuals in or close to the administration. If the government issues 2,000 permits per year for the last 10 years, we have at present, a total of 20,000 taxi permits in the Klang Valley, all of which we believe or are led to believe are being utilised.

By Delimma

Having your car in the workshop can be more painful than you can imagine, and I really mean it not just from the holes the repair bill will punch through your pockets. A decent repair job on a vehicle can cost you as little as RM500 nowadays – but once the mechanic starts to fiddle with other parts of the car that you might think sounds or performs strangely, things start to get from bad to worse. And we are talking about new cars. Imagine the magnitude of suffering of older or used car owners whenever they have to make the dreaded trip to the old ‘under the tree’ mechanic.

The government in its absolute generosity to help the people came up with a brilliant idea – let’s beef up the taxi services and get more people to utilise public transport to ease their suffering in vehicle ownership. But wait, isn’t that going against the Mahathirian theory of ownership of vehicles for all families to ensure his pet project remains relevant even if the actual offerings aren’t? But then again, the taxi service industry does provide a good source of income for people who want to venture into this industry. But the chaotic way in which it is being implemented makes one shudder at the prospect of having to use this mean as a major source of breadwinning for the family.

Let’s say the same number (although a bit too conservative) is issued over the next 10 or even 20 years. Mind you, this is the government’s effort to provide would-be job seekers, pensioners, the unemployed and budding self-entrepreneurs the chance to eke out a living in this industry. What with the present meter system that is very much lauded by the taxi operators and yet too burdensome for some passengers. Yes, in the next 10 years or 2020, we will have 40,000 taxis, and in 2030 60,000 taxis.

The first question we wish to ask will always be – are we sure we need that many taxis in the Klang Valley? What with the already appreciating number of vehicles on the road, we are adding more potential ‘jam ingredients’ onto the streets. And at this time of writing, the government has allegedly issued another 10,000 taxi permits this year alone. So the number given as an example may be too safe a figure. But the end results point to more taxis; but will they have enough passengers to ferry?

The government is also spending billions of our good taxpayers’ money on improving the public transportation system, like buses and trains, LRTs, monorails and the recent announcement of a new underground system. If the government wants more people to utilise these alternative transport system as opposed to using the roads, dishing out more taxi permits in the pretext of promoting entrepreneurship is a dodo of an idea.

The next question is, who are these permits given to? Although pensioners are still able to contribute to the economy, I pity them if they are sucked into the present mire of the taxi service. Most foreigners, especially the ‘Mat Sallehs’ prefer to take taxis driven by younger drivers. No offence, uncles, but where they come from there is a maximum age limit to driving. In the UK its 80 although for public transport services the age limit is below 50, in the US people above 60 are being driven instead of driving themselves.

It is not a question of age, but more of the genuine concern over the welfare and well-being of old taxi drivers. What happens when a driver gets a heart attack in the middle of driving a passenger? It will not only create danger to the driver and passenger, but to other road users as well. Has the government given enough thought to this before coming out with such a policy? We pray so.

Then there are permits given to companies, whom many suspect are just there to make ‘money on top of the wind’ (translate into Malay, please). Why? The companies sometimes get 1,000 or even 5,000 permits or more from the government, each at a yearly rate of RM20 per permit. That’s a lot of money mind you to be paid to the government for the permits. But these companies have an ace up their sleeves. They can ‘rent’ out these permits to those poor budding entrepreneurs out there.

And here the alarm bells ring out as if Mike Tyson is back in the ring. The companies rent out the permits individually to taxi drivers at the rate of RM12-15. Cheap, eh? But on a daily basis. So a taxi driver has to pay RM360-RM450 per month for a permit the companies only pay RM200 per year. No wonder our taxi fares are soaring each year. Poor taxi drivers have to prep up the payment somehow.

And the icing on the cake is the hire-purchase scheme for taxi drivers. One has to pay about RM3,000 – RM5,000 as deposit to get on the scheme. This is similar to the normal payment we have to pay for purchasing a Proton vehicle. Most of the taxi drivers have to fork it out from their savings, EPFs (for pensioners) and even loans (mostly from Ah Longs). On top of that, they are charged the rate of RM45 – RM60 per day for the hire purchase vehicle they are using, of course the charge includes the permit rental. So an average taxi driver has to pay RM1,350 – RM1,800 per month for a Proton-Saga type taxi. We will not even discuss the rate for bigger and more ‘luxurious’ vehicles.

On average, taking into account a daily gas-charge fill-up of about RM20 – 25, a taxi driver has to pay RM65 – 85 per day for the taxi. That means to earn a modest RM50 a day, a taxi driver has to make a business of RM115 – RM135 per day. In the crazy world of Klang Valley today where there are thousands of taxis around, that would be a hard thing to achieve. Many drivers complain of having to work well over 12 hours per day just to make that measly sum.

Then there is this coupon system, utilised at the airports, railway stations and even at good old Putrajaya and Sentral stations. The fares charged are already burdensome to passengers, and the taxi drivers still have to pay 10% commission to the company that operates the coupon system. To make matters worse, the companies insist that the drivers make their claims ‘over the next day or two’ and not immediately after sending their passengers. Somehow this ruling seems absurd and smack of abuse by the companies.

And the worst part is that it is these companies that are teaching drivers not to use the meter system. Instead, they make a summary of usual charges, beef it up a little due to the costing of the coupons and administration, and add 10% more for their commission. And you have a system that is running directly against the present system. Is the government aware of this, or are these companies ‘too well-linked’ to be disturbed?

And then we have the ‘sweepers’ (in Malay sapu). These are drivers who linger around hotels, stations, shopping complexes and public areas where they believe they can make a free and easy kill. Instead of using the meters, these drivers cut (potong) or charge absolutely astronomical charges to ferry unsuspecting passengers (usually foreigners and tourists). Many a complaint has been submitted to the CVLB, but as one officer puts it, we are too few and they are too many for us to implement the law or catch them in action. But any fool can witness taxis ferrying passengers at night with their ‘for hire’ light still on, meaning they are definitely not using the meter.

Then there are those that abuse the meter and add certain gadgets to make the meter run faster and the charges higher. Talk about Malaysian innovation. Those that were caught are often let off the hook by some technical glitch or unfortunately as a taxi driver alleged, after some token was paid to the personnel concerned.

And to add fuel to fire, a recent report alleged that there are about 2,000 foreigners driving taxis in the Klang Valley at present. We all know that their international driving license can be used in Malaysia, but we also know they can’t use it for taxis. Who on earth gave them the permission or even lease of the taxis? We can deduce that some foul play is at hand here … either the companies or individuals who have the permits do not care and are only interested in the money; or that they are also in cohorts with these foreigners. Many of them are even worse drivers and do not even know locations of certain places. And some of them have also picked up the potong habit.

There you have it. The present scenario of taxi service in the Klang Valley. All too clear and yet very little action taken. You have on the one hand good natured and honest taxi drivers trying to make a living but they are being butchered by the taxi companies who always come up with grand ideas of how to make more money for themselves. On the other hand you have the scoundrels who are giving taxi service a bad name. And in the middle you have the taxi companies who win no matter what.

What is necessary is for the permit system to be debunked, and instead of issuing permanent permits that add to the problem every year, the government should instead introduce a rental system themselves, where permits are rented individually to drivers at a monthly or yearly rate fair to all. And the renter has to be responsible solely for the permit given – accidents, breaking the law etc. That would educate taxi drivers to use the system, or else they can be nabbed just by a report from a passenger and be held accountable for their actions. It would save CVLB a lot of cost on enforcement, but also make them the only source for all things concerning the taxi service. What good is the CVLB if it is seen as a toothless snail?

Instead of revamping the permit system for a more controllable system, the government is making it worse by dishing out more and more permits. At the end of the day, companies allegedly linked to the administration seems to be moving up, while our taxi service lives to die another day.