Improving Malaysian taxi service

Yesterday’s news in Cars, Bikes, Trucks gave some hope in one of the most problematic public transportation here in Malaysia, specifically in our capital city, Kuala Lumpur. I even wrote about it a couple of years ago where a few bad apples in the taxi service industry have tarnished the image of this country.

Thus it is encouraging to read the news:

SPAD Plans to Merge Taxi Companies

The merger of taxi companies in Malaysia is on the cards.

According to the chairman of Land Public Transport Commission (SPAD) Tan Sri Syed Hamid Albar, the proposed move to merge the cab companies would only increase the competitiveness of the public transport industry.

“If you remember the financial crisis in the late 90’s when the country was hit by economic downturn, several banks were merged to strengthen the financial institutions. This is the same formula for the taxi industry,” he said at a press conference after hosting meet-the-taxi-driver luncheon session for 500 cabbies at SPAD headquarters in KL Sentral today.

He also added that SPAD would standardize allocation and distribution of individual taxi permits as well as leasing as part of an effort to restructure the industry in the upcoming National Land Public Transport Masterplan.

“There are 45 per cent individual taxi permits out of the 37,000 taxi permits at present in Klang Valley. SPAD is scrutinising the whole range of individual taxi permits to ensure that the standard of service of the taxi drivers will continue to improve,” said Syed Hamid.

Cars, Bikes & Trucks learned that more details of the merger and restructuring of the taxi services would emerge when the government will host another round of meet-the-cabbies session soon.

Syed Hamid also added that since 2011, no new taxi permit was issued by the commission in view of the high number of taxi drivers in the country.

The taxi-to-passenger ratio for Klang Valley cabs is considered as among the highest in the world with 4.8 taxis against 1,000 populations.

This is in contrast New York City’s 13,237 yellow cabs in 2011, a ratio of 1.6 against 1,000 people followed by Hanoi at 2.2 per 1,000 persons, Jakarta at 2.65 per 1,000 populations and London at 2.8 per 1,000 people.

“The commission discovers that sizeable numbers of taxi permits are inactive or dormant. Most of these cases involve individuals, associations and organizations that received the Special Approval Letter (STK) in the past but failed to operate over a period of time,” he said.

In addition, he said, SPAD is currently negotiating with cab operators to standardize the existing hire purchase practice because “there’s a wide range of rental rate, between RM45 to RM15 per day.

Syed Hamid also said the commission won’t seize the taxi permit without a valid reason and “will only retrieve the dormant permit.”

“If the permit holders do not have the financial capability to purchase a new taxi including insurance, maintenance and so forth, SPAD will try to assist them to obtain loans from financial institutions,” said the commission supremo.

I won’t delve further on to something which is not yet certain but merging taxi companies will surely be a good thing. Actually the best case scenario is to follow the history of RapidKL buses.

Back in the day before RapidKL buses existed, even before the now defunct bus operators of Intrakota and Cityliner plough the routes, there were many bus operators in the Klang Valley. We had Len Seng buses, Len buses, the Selangor Omnibus, Sri Jaya buses etc. We also had the highly dangerous speed demons called Bas Mini Wilayah.

This scenario is very much akin to the current taxi industry where there are too many players and laden with poor service.

What happened to the bus service industry was, Prasarana bought over Intrakota and Cityliner in 2003 (while retaining those two as operators) and they began operating as RapidKL  in 2006.

As the result, there are synergy in the efficiency of resources where profitability of the routes increased, better service all around, timeliness has improved and a more manageable supply and demand.

Compare our current bus service to the one we had in the 90s and we can see huge improvement.

Therefore the merger of taxi operators should be something to look forward to. Just from the news report above we can see red flags all over the place. Too many dormant permits, too many taxis (disrupting the supply and demand), problematic hire purchase practice, and 45% of 37,000 permits are individual permit holders. That means, there are possibly 16,650 taxi drivers trying to survive on daily basis with meagre income.

Apart from bad service by some taxi drivers, the industry itself is rife with other problems such as political interference and alleged corruption in giving out taxi permits.

All these have to stop now.

Since the advent of ETP where the government is cultivating greater cooperation and initiative from the private sector, it would be good if there are highly experienced and financially capable companies to back this plan. If there is one flagship (let’s skip the Intrakota and Cityliner busines model) much like RapidKL to operate the whole taxi industry in the city centre, then there will be synergy which will benefit the end users.

Imagine if for example, RapidKL takes over all taxi operating companies and all willing taxi drivers are employed as full time staff. The management can then plan the routes and areas with greater efficiency. There won’t be any overlapping of supply, connectivity of residents in Klang Valley will be maximise. From residential areas where there are no RapidKL buses, there will be taxis to pick up passengers to LRT Stations. Or taxis will only travel the routes where there they will not overlap the LRT or monorail routes. Taxi drivers are paid salary instead of relying on meter fares. Thus decreasing the risk of taxi drivers cheating customers. Disciplinary action can be taken to errand taxi drivers and dealt with more effectively since they are full time staff. Above all, there is no more need to issue taxi permits.

Well this is just a suggestion; from an outsiders’ point of view.

Better connectivity is what is missing in our public transportation industry.

But if RapidKL has too much on its plate then there are other private conglomerates in the automotive industry that can surely operate this kind of business. What is important is the need to standardise and improve the service immediately. Otherwise the whole industry will jeopardise our reputation as one of tourists’ favourite destination.

#new-economic-model, #public-transportation