Taxi fare hike hots up

It is unusual for a small fare hike to generate so much heat. When comparing to the fares in big cities like New York or London or Paris, or Tokyo, the taxi fares here are too cheap. It can go up another few notches to be in the league with the big cities. We are now the 6th most expensive cities in Asia which is still too far to claim the top position. We need to work harder to be at the top.

So what is all the hooha about the taxi fare hike? Cost of living has gone up, property prices, car prices, diesel prices, and the taxi drivers need to get some pay increases as well. When people earning millions of dollars are not satisfied and wanting more increases, it is only natural that the taxi drivers should want to earn more as well. They may not be thinking of another private property or upgrading to private properties, but the cost of a public flat is no longer that cheap anymore, but of course mah, still affordable.

Let’s not begrudge the taxi drivers from wanting to earn more income to support their families. But the way they went about it may cause some concern. The Competition Commission of Singapore has raised its sensors when ComfortDelgro opening called for other taxi operators to join in the fare hike. It is lucky that they made it an open call for fare increase. If they have done it quietly, it will become price collusion or price fixing. An open call is not price collusion or price fixing. They are safe and not violating any laws.

Some taxi operators are itching under the pants. Who would not want to raise the fare and bring more money home? It will be very tough for any operator not do follow suit.

Would it be too much to ask for to expect a few operators to hold their fares and refuse to join the hike? Actually it will be a big boost for all the operators not to go along and the passengers would have an easy choice to make when calling for taxis. They could all boycott, okay boycott is not a good word to use, they could all call for other taxis except those from ComfortDelgro. In this way, they need not pay more while the other taxi operators will enjoy at least a doubling of income when the demand for their cabs goes up immediately.

We have never seen such competition in practice in a free market situation. With limited number of operators, it is difficult to prevent collusion or monopoly of fare prices. This current fare hike is a great opportunity for the taxi industry to try to do what is best for them and their customers and allow free market forces to be in play. Alternative political parties may want to chip in to support a system where the fare structure is different for different operators. Nevermind the argument that everyone must follow the same system and structure so as not to confuse customers.

At this point in time, the customers are used to the present system and announcing that they will stick to the present system will not confuse anyone. The only customers that will be confused will be those taking ComfortDelgro and faced with the new system.

The ball is now in the court of the smaller taxi operators. They could go it on their own and claim a bigger market share. This time the market share will be big without them having to do anything. I say, give the customers a chance to have different fare structure and different fares.

Be loyal to your customers and think of their interests and their pockets.
By not hiking their fares, their income will still go up if the loyal customers and new customers choose not to call ComfortDelgro cabs. But the price is that they would be working harder as the demand will definitely be very high. I will definitely go for the other operators when there is a choice.

It's business and fair competition in practice. Go for it man, get your market share and a bigger piece of the pie, and win more goodwill from the grateful customers. The customers will definitely remember and reward the taxi operators for not hiking fares at a time like this.