When is a taxi not a taxi?

Christopher Tan of the Straits Times published an article about the unfair playground private hire vehicles (Uber/Grab etc) operate in. (ST/25th April 2017 – Beware of being taken for a ride)

He may not have specifically said it, but he appears to suggest that Private Hire firms suffer the same regulation as taxi companies. But that would return the problem that plagued Singapore to start with: we did not have sufficient taxis to meet demand because of these government made restrictions.

One cannot solve a problem created by regulation, with more regulation. LTA attempted to make more taxis available through lots of regulation: requiring them to drive 200 km a day for example. What we got was more tired drivers and still insufficient taxi/customer ratio.

To draw a parallel, consider this quote from Jeremy Clarkson, “Why are we placing speed limits? If you want to clear congestion, you want the cars to speed up, not slow down!” Of course he said this in jest, but the logic applies.

So Uber and Grab has managed to do what LTA could not – put more vehicles on the road. Had they entered the market as taxis, you would still be waiting by the kerbside for an hour drenched in the rain whilst every uncle seems to be going a different direction from you.

Until now, I maintain that these Private Hire Drivers are not taxis. Let alone be labelled as pirate taxis. Let’s take a look at the three differences that distinguish Private Hires them taxis.

Taxi companies are asset rich companies. They own big and expensive resources to help them in complex operations. The companies have expensive vehicle maintenance bays, satellites and a tremendous number of ground staff to assist with their business. Private hire companies on the other hand, are resource light.

Taxi companies own the vehicles and directly manage it themselves. Taxis can decide what to install in their vehicles, can charge for advertising and restrict servicing, repairs, insurance to their authorised partners. As a taxi driver, you are not free to deal with your vehicle as you wish – because the vehicle is not yours.

Some private hire vehicles are rented, but because they are private – they have liberty over their use, as we have seen with innovative features such as fridges, food, karaokes, mobile office facilities and so on.

Merely considering “ferrying people from point to point” is too hazy, there are many variety of vehicle/driver relationships that perform this; classifying them as taxis is a mistake. For example, delivery drivers, tourist drivers, chauffeurs – which is why there exist a species of drivers called “private hire drivers”. On the Staten Island ferry schedule in 2017 it stipulates that they are not a taxi and have a clear set of different rules to abide to.

Taxis can do street hire. Christopher Tan tells us the “smart phone is the new kerb”, but there still are a great many people (tourists, the elderly, the illiterate etc) whom cannot or do not want to use the smartphone. If there were so many taxis available for me to flag in an instant, there is no need for me to tap the smartphone and wait for a vehicle.

In a nutshell – taxis can also use Uber/Grab services, but private hires cannot become taxis.

The Private Hire companies may not admit it, but their drivers are freelancers, not business owners. The drivers are responsible for their own insurance, repairs, damages and have to decide where (and when) to get these done. They don’t have a boss to report to, because – they’re not taxi drivers, they don’t have to report to anyone. It is freelancing pretty much the way a photographer or a graphic designer is.

You may still continue to ask – why are they not Pirate taxis then? For this we turn to the law. We have to ask: what mischief was Parliament trying to solve in the days when Pirate taxis were rampant?

Broadly, it would be these:

– Arbitrary pricing
– Crime
– Inability to organise roads and drivers

Does it appear that the Private Hires contribute to these substantially? On the contrary, Uber and Grab are so well organised they’re able to solve these problems faster than law enforcement can. Their technologies and ideas are so successful that traditional taxis are copying their mechanisms.

If they don’t create these problems, they don’t fall under the law – they are not pirate taxis. They are merely a freelance chauffeur whom will give you a ride, for a fee. There isn’t a label that has been invented in the world for these drivers yet, hence the lingo “I’m calling an Uber”.

Are we going to allow the lack of a label thrust us back into the 20th century?

These technologies won’t work if we apply the same legislation for taxis to private hire vehicles. There will not be an abundance of drivers, the costs will be far too high to enter the market, and worse, they’ll have to collaborate with the existing taxi cartels so that each will have an even share of profits.

Comfort has tried to use technology before Uber and Grab came into the picture – they failed.

Our minds are so shackled with legislation and regulation, sometimes we need to step out of this box to create truly innovative products for the betterment of all.



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