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83% Hike in Taxi Fares not Comforting at all

By Gerald Giam

The newspaper, TODAY, carried this report in its August 14, 2007, issue:

“For the half-year ended June 30, 2007, ComfortDelGro achieved an
8.6-per-cent increase in revenue to about $1.5 billion. Net profit rose
10.5 per cent to $113.9 million.”
(Click here and here)

Comfort Delgro is the parent company which also runs SBS Transit, besides their fleet of taxis.

83 per cent.

Yes that's how much more I calculated it would cost to take a cab from my mother-in-law's place in Tiong Bahru to my home in Sembawang.

I am shocked by the magnitude of ComfortDelGro's taxi fare hike this time. It's one thing to increase the flag down rate and peak period surcharges, but to double the meter hop to 20 cents is plain profiteering.

ComfortDelGro earned almost $2.8 billion last year, with profits of over $300 million. Instead of sharing more of their profits with their drivers, they are upping their fares and trying to justify it by pointing to the plight of their drivers. I have no objection to cabbies earning a little more, but I'll advise all the "uncles" to make hay while the sun shines. In no time, your rentals are going to also increase and your fuel subsidies reduced or removed.

The government has since 1998 deregulated taxi fares. This means that taxi companies are free to set whatever fares they like without seeking permission from the Public Transport Council. But deregulation only works well if there is fair competition. With 65 per cent of the taxis in Singapore, ComfortDelGro is as good as a monopoly. And it has played out time and again that whenever Comfort raises fares, the rest of the taxi companies follow suit. So much for competition.

The Taxi Operators' Association, which called Comfort's revision "fair and timely", has also urged other taxi operators to adjust their taxi fares "as soon as possible". I'm no expert in competition law, but doesn't this smell like cartel behaviour?

The government always points out that taxis are a form of private transport and there are alternatives, like taking a bus or MRT.

Tell that to the pregnant mum who never gets a seat on the train because everyone is "sleeping".

Tell that to the disabled man who doesn't have a wheelchair friendly bus plying his route to work.

Tell that to the family who has to transport their sick grandmother to hospital for treatment several times a week.

I have always thought that taking cabs are still cheaper than owning a car. I haven't done my sums yet, but maybe now it would be cheaper to buy a car to clog up our roads and pollute our air more.

Read Mr Brown's take on the increase here: "Complain about taxi somemore?" 

Read also: "ComfortDelgro's profits rise" by theonlinecitizen.

And: "Public transport: Uniquely Singapore, F1 or F9?" by Leong Sze Hian.

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