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Friday, June 10, 2005

Singaporean Things That Just Don't Make Sense - Part One of Infinity

The Economics of Taxis

Economics is all about demand and supply. Alright, so sometime back the Public Transport Council (PTC) decided that there isn't enough 'competition' on the roads for taxis. As a non-economics professional (defined as someone - me - who is now a professional in other fields except economics because I was forced to drop econ after JC1), I really don't know what 'competition' means. Can't blame my ignorance.

So you think you know?

Okay, based on my understanding, the PTC felt that there weren't enough taxis on the road. But instead of merely increasing the number of taxis, they decided to allow more taxi operator companies to come on board so that there would be fair competition. I think it has got to do with preventing Comfort-Delgro becoming a monopoly and charge exhorbitant taxi prices 'due to fuel hikes'.

So the likes of SMARTcab, Union Cab, Silvercab, etc came into the taxi queue. And there are now more taxis on the road. It's a fact. Really.

Then you still hear cab drivers complain that there are not enough customers. What is worse is that they have to pay daily rental charges to the taxi company. Minus that, their take-home earnings are quite meagre.

And then there's still the 'magical hours'. I thought that since there are more taxis on the road, the drivers would 'compete' with each other to get customers to earn as much as possible, right? Basic economics right?


It is almost an impossibility to get a cab between 8am and 9am, and between 1045pm and 1158pm. The 'magical hour' appears at 9am and at midnight. This is when ALL phone booking lines are open, and when blue "TAXI" lights flash on.

At every midnight, this is the Singapore equivalent of the Northern Lights or Auroras found in the arctic regions. A beautiful sea of blue lights dance on the roads of Singapore. A wonderful sight.

Where there were NO cabs and thousands of frustrated taxi-waiting customers on the road prior to 1158pm, there are now almost NO customers and thousands of available cabs on the road at the stroke of midnight!

Maybe Cinderella's Fairygodmother took up citizenship in Singapore and all the street rats and cockroaches changed into cabs with neon sky-blue lights at the stroke of midnight. By the way, this is a conspiracy theory and it links with the reason why Singapore is such a clean city as well. The rare rodent/cockroach that you find after midnight are just serving their penalty for using long cab routes or refusing to take passengers to places like Bedok and Tampines from the airport. I also heard that it wasn't cheap to bring in Fairygodmother, but she got a good deal when ICA allowed her to have dual citizenship. That lucky bitch....

Anyway, I just don't understand taxi economics. All I see is that drivers and passengers are always at the losing end while the taxi operator companies are getting richer with everyone's daily rental contribution and 'on-call' bookings.

I also see the negative aspects of this coming into place: Drivers who purposely wait for call bookings during peak hours. Drivers who go to the airport to pick up passngers. Drivers who turn on 'that magic blue light' at the wave of Fairygodmother's wand. All for that extra income.

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