Now I should make it clear that taxis are not my preferred mode of transportation. The lack of a steady income makes taxi-flagging a frivolous expenditure, all the more so when you have previously worked a meager $7/hr job. I could hardly justify spending 2 hours worth of wages on a taxi ride.
Normally I refrain from making needless comments on the local transportation system, since I believe the people behind infrastructure-planning know their stuff, and that the future generation will be taxed for it anyway. The latest taxi fare revision however, has been met with much disdain. All in all, it probably doesn’t concern me since I abstain from taxis. However, I know when a deal stinks to high heavens when I see one.
This publicly listed taxi company came up with a half a**-ed concession of 20 cents off booking fees, as well as the removal of $1 surcharge during public holidays. Cost savings right? The flip side includes the extension of peak hour surcharges that might as well encompass the whole week; it now runs daily and extends from 6pm to 12am, after which midnight surcharges are going to kick in. Basically everyone who flags one down out of office hours is going to pay the surcharge.
Of course, they are answerable to equity holders, but couldn’t they come up with better ways to point the middle finger at the public? Well, if the majority had a collective vigilante sense, they would have shorted their stock till kingdom comes. And that is where it wouldn’t happen, because in this funky world of finance, nobody would ever risk the erosion of their own capital. And as corporate finance puts it, we may frame this in terms of agency costs; managers may not always undertake the best decisions for the company, in favor of shareholders. Maximization of shareholder value, anyone?
Not that they are slouches in the timing department. This corporate move coincides with this period of high Certificate-of-Entitlement prices. For foreign readers (if there are any, I hope!), the COE is the equivalent of your car license plate, and it hovers around $70,000 currently (a function of supply and demand). For this piece of paper, that excludes the cost of the car. For the poor folks who have previously opted out of buying a car just because they could save (perhaps marginally more) by taking a taxi as and when needed, would find themselves in a worse-off position. Their purchasing power is going to be compromised. Taxi claims for staff benefits will rise proportionately, translating into higher operating costs. The macroeconomic effects go on and on.
Well we could say that taxis are a form of luxury (they do differentiate it from regular public transport, citing it as a premium service), and that would undoubtedly swing even more people onto the already crowded public transports, whom of course another listed company has monopoly over. Monopoly is this voodoo which enables you to pass on inflation costs to the consumers, so to speak. Proponents of this move often compare our prices to that of other countries, which are considerably higher. That I humbly think, is an unfair assessment, as we are governed by different laws and tax codes, not to mention the difference in space and infrastructure. One factor worthy of mention, as I had found out recently as a fresh graduate, is the considerably lower starting wages. I have had a recruiter baulked at me when I mentioned I would like to start off with a modest $2500. Allow me to do the math of my take home pay; after CPF (a compulsory government pension fund with modest returns) at 20% I would immediately be left with $2000, times 0.93 after deducting Goods Service Tax will leave a real income of $1860. Assuming I do not reinvest, inflation would eat away at around 5% to a mere $1700. That is all without living and transportation expenditure, and I am majorly bothered at the diminishing prospect of owning a house, valued at around $400,000 for a mere 4 room flat (depending on location). We do not have a minimum wage, and that would definitely hurt our country in terms of competitiveness. That’s the way we roll, how could we effectively compare?
I didn’t think our country is all democratic, which has it uses. After all we can’t have incidents like Qantas going on and off; these incidents leave gaping holes in GDP. However, I didn’t think our people would give anything to stand by their opinions either. They do not want something enough to do something about it. This taxi company actually had the audacity to state that the revisions are in part due to higher demand. Well we know one way to meet such a demand is to increase your supply, instead of the blatant casting of lucrative nets. The PR team manages to make it sound meaningful when there is none at all:
“That’s because one operator – **** – has announced it is revising its fare structure from December 12 to better meet the increased demand for taxis.
And the National Taxi Association is urging other operators to adjust their fares as soon as possible.”
Well, like I’ve pointed out, we do not want something enough to do something about it. One solution involves a collective halt of flag downs, maybe for just one day. This would promptly show who the heck is in charge of the supply and demand curve. Since the drivers label their offerings as a premium service, they couldn’t expect our obligations; I wouldn’t be surprised if their union crawled all the way back and kick down the door in the midst of their AGM. Of course, who would get out of their comfort zone? We have important meetings, woke up late, or are just plain darn lazy. I would call us pansies.