THE Land Public Transport Commission (SPAD) has unveiled the Taxi Industry Transformation Programme (TITP), aimed at reforming traditional taxi businesses and legalising private vehicles for e-hailing services.
TITP comprises 11 programmes. Responses from drivers, operators and passengers are varied, as they have conflicting interests. The way forward is to hold discussions and not through outbursts.
1. Regulating e-hailing as an intermediary service under the Land Public Transport Act 2010
The act will be amended to require e-hailing companies to be incorporated in Malaysia and subject to local laws and taxes, e-hailing drivers to obtain a driver’s card from SPAD and their private vehicles pass roadworthiness inspections.
These companies and drivers are to register with SPAD to avoid legal action as their services remain illegal until the law is amended.
Many Uber and Grab drivers have been harassed by cabbies.
The most unfortunate ones had their vehicles impounded by the authorities, while e-hailing companies had escaped scot-free.
To make amends, they should be compelled to make a sizeable contribution to a pool fund for training.
For example, Malaysia Airlines and AirAsia were fined RM10 million each by the Malaysia Competition Commission as their market-sharing agreement was deemed anti-competitive.
2. Issuance of individual licences and government cash grant for drivers leaving the pajak system
From Sept 1, individuals may apply for metered taxi and hire-car (non-metered taxi) permits, but candidates with criminal records and unsettled traffic summonses will not be considered. To qualify, one must be a Malaysian and not declared a bankrupt. There was no mention of age limit, and rightly so, as physical and mental health are far more important.
While the government is trying to assist those who have been declared bankrupt, to continue without the debt burden, including automatic discharge, SPAD is adding an unnecessary condition.
If those with permits are unable to obtain bank loans, they can seek financing from taxi companies, albeit at higher interest rate.
Taxi drivers ceasing to pay instalments for rental-purchase of their taxis will have to surrender the vehicle or be repossessed by taxi companies, which do not take the trouble to institute bankruptcy proceedings, unlike banks, which have made 30,000 registered car owners bankrupt.
Qualified drivers leaving the pajak system will be given RM5,000 by the government to buy a new taxi after receiving an individual permit.
3. Liberalise vehicle model for taxis
Vehicles allowed for taxis will no longer be based on minimum engine size of 1.5 litre but on a minimum three-star safety rating by Asean New Car Assessment Programme (NCAP).
National cars that qualify are the Perodua Axia 1.0 and Proton Saga 1.3 with three-star NCAP rating.
Three Perodua models with four-star rating are the Myvi, Bezza and Alza, and two Proton models with five-star rating are the Iriz 1.6 and Preve 1.6.
The Perodua Bezza 1.3 and Proton Saga 1.3 will be the most popular models for budget taxis in future.
4. Standardise taxi rental contracts with statutory contract terms
Similar to hire-purchase agreements under the Hire-Purchase Act 1967, rental-purchase agreements will be standardised and controlled.
The inclusion of rent-free day for Puspakom inspection is nothing new but the introduction of annual/sick leave, deposit refund and comprehensive motor insurance can backfire.
Like all self-employed people, drivers can choose when and where to ply their trade, taking whatever leave whenever they like.
But many are immature to ask for leave, Employee Provident Fund and Socso benefits when they are customers, not employees of taxi companies. Comprehensive motor insurance should remain an option as additional costs will be transferred to drivers.
Similarly, the deposit is a down-payment for a loan, and if the amount is to be refunded, drivers will have to pay higher instalments.
The current arrangement is fine as the vehicle belongs to the driver upon full settlement of the loan, and can be sold to raise payment for a new taxi.
5. Introduce mandatory KPIs for taxi operators
Taxi companies have been downsizing. With the introduction of key performance indicators (KPIs), the smaller ones will close shop sooner.
It will be unfair and unnecessary for them to be responsible for the drivers’ minimum hours of operations and quality of the taxis as the vehicles are owned and maintained by the drivers.
Drivers can be made to download apps on their phones and offered incentives to run more trips, especially during the rush hour, but some will not respond as they prefer their old ways.
6. Impose stringent pre-screening processes
Kudos to SPAD for taking up the role of gatekeeper by issuing the driver’s card only after stringent screenings of taxi and e-hailing drivers.
The health checks should be conducted annually for physical and mental, apart from criminal records and traffic offences.
7. Increase service standards using merit and demerit systems
SPAD will work with the Road Transport Department on the Kejara Demerit Points System and drivers will also be monitored by SPAD’s merit system.
The carrot- and-stick approach is bound to improve service standards if implemented well but records were dismal.
8. Rationalise metered fare structure
In March last year, budget taxi fares were increased to RM3 for
flag fall, 25 sen per 200m or 36 seconds, with Teksi 1 Malaysia (TEKS1M) slightly higher at RM4 and 30 sen
Instead of helping TEKS1M drivers to offset the higher costs of operating a Proton Exora MPV taxi, the measure backfired as they were shunned by most passengers, who are price sensitive, although it is much cheaper than executive taxis at RM6 and 40 sen respectively.
It was the same when premier taxis were introduced in 1998 with starting fare of RM4 and RM1 per km while budget taxis were RM2 and 67 sen per km respectively.
The rates for new TEKS1M will be the same as budget taxis.
9. Rationalise zonal fare
Zonal fares are unfair to drivers and passengers but it is a safe method as meters can be tampered with.
But with global positioning system on smartphones, passengers will be aware of the quickest route and shortest distance to their destinations, deterring drivers from cheating.
10. Dynamic fare for metered taxi providing e-hailing services
Taxi drivers are allowed to collect e-hailing fares should they choose to participate, but they are in a no-win situation.
E-hailing apps are prepared to bear operating losses by charging rates lower than regulated fares as they are more interested in capturing market share to boost their company valuation.
For example, Uber was valued at US$60 million in 2011.
Today, it is worth more US$68 billion and least concerned that it had never been profitable.
Drivers using taxi apps will still lose out to ride-hailing apps,
which will always charge lower fares.
Although many driverss have switched to driving private vehicles to provide e-hailing service, it is difficult for those driving taxis to accept lower fares or passengers opting to use them as their taxi registration will appear weird on smartphone screens.
Announcing that this measure can boost the income of taxi drivers is akin to rubbing salt into their wounds.
11. Establish taxi driver’s improvement programme
Drivers will be required to undergo training by providers appointed by SPAD.
While training helps, drivers will not change much. Millions of traffic offences occur because there is no fear of being caught.
Those who pick up passengers using e-hailing apps are aware that they can be deactivated by poor ratings from passengers.
Taxi apps can do the same but
are less strict because of competition from a dozen firms operating in the local market when two are enough.
The best way to boost a service culture is for these taxi apps to consolidate and compete against e-hailing apps. These taxi apps should offer training to the drivers and participate in the Taxi Driver Accreditation Programme.
Y.S. CHAN, Kuala Lumpur