12/12/2007

Straits Times agrees with Redbean

I read the ST Editorial today and it said that the paper agrees to a big bang approach on taxi fare hike to $7-$10 flag down rate and remove all the other charges. I too suggested this with as a tongue in cheek proposal. Looks like the taxi companies are going to adopt the little increments, bit by bit, so that it is not so painful approach. I think they should go for the big whack as people who can afford taxi fares can afford to absorb big hikes compare to the poorer mrt and bus commuters. Hey, as some have said, taxi is a luxury item. Fear not. Make them pay.

3 comments:

Anonymous said...

Your suggestion would solve the problem, but looking after their own self-interest is more important to the taxi-operators than solving the problem.

A big whack will definitely depress demand, and if that happens, earnings will be affected, some drivers would give up driving and more taxis would lie idle. Better to let the problem fester and reap the rewards than solve it.

Matilah_Singapura said...

IMO the cab fares are still very reasonable, given the recent rises in charges.

Frankly I still think that "road space" during times when road space becomes a scarcer good—i.e. during peak periods—is still way below what the market will truly bear, and thus ease congestion.

I still guess that the right market price for road space (ERP) during peak periods is in the $20-30 area.

anon 1:11

> looking after their own self-interest is more important <

Everyone looks after their own interests, all of the time. This is the basis of all human behaviour. Our cabbies have long been under paid.

> A big whack will definitely depress demand <

That's perfectly OK. Supply will adjust as a result, and there might even be less cabs on the road easing congestion. At higher prices people may choose to take buses and trains instead, or pool cabs and share the fare.

In any market, all reasoning agents (aka human beings) respond to incentives.

> Hey, as some have said, taxi is a luxury item. Fear not. Make them pay <

There is no need for emotional moralisation or to turn this into a socialist "class war" by dividing your own people into "us" and "them".

Cabs simply offer a "value-added" service. The "Values" being appealed to of course are in the minds of the buyers. Some of the values added are:

• Customised route and precise destination: drop exactly at destination (not at bus stop or MRT station, nor does a cab have to follow specific routes like buses and trains)

• Call: You can call for a cab anywhere you are. For buses and MRT, you'll need to walk to the nearest station.

• Solitude: don't have to share your space with other strangers, some of whom you may not like (for whatever reason)

• Speed: Except for gridlocked city streets, trips by cabs are generally faster than buses or trains.

• Comfort: More comfortable ride, especially in the new "limo" style cabs.

• Luggage: You are able to pack up a whole boot (and more) with luggage.

• Baby-friendly: Cabs are easier to use for new parents.

• Wheelchair friendly: Cabs (Maxicabs) are easier to use for old parents.

• Pleasant experience: with well-attired and polite drivers, who are good conversationalists.

• Newspapers and magazines usually provided

• Can use credit/debit/NETS cards: and thus qualify for "points" or "lucky draw"

• Drunk: Cabs are a god send to those who get completely wiped out by having a spectacular night on the town.

• Tipping: Taking cabs allows you to exercise your appreciation and generosity by offering a gratuity to the driver fro doing a splendid job. (I'm not joking. I take my own (selfish) pleasure in tipping cabbies)

...and the list goes on.

Value adding is reflected objectively in higher market price being offered.

To those who think the added value is "worth it" they will pay the extra. To the others, they can still get from A to B by buses, trains or on foot.

No one loses in a market.

redbean said...

wow, matilah saying no to 'emotional moralising' hor: )