Saturday, October 17, 2015

"Don't take Uber, It's Cheaper!" HUH?!?!

Personally, I believe that the future is in disruptive technologies such as crowd technology, which Uber relies on. Uber is basically plugging the gaps between what taxi companies are currently offering and what private consumers want. However, they are not just filling the gap, they are actually eating into the taxi's market share because of the inefficiency of the taxi market. I do think that this is a positive for consumers, and this article is a pretty good case example of what Uber offers which taxis do not.

That being said, I do have some pity for taxi drivers. (sources: LTA, Uber)

As you can see, taxi drivers are actually competing at an unfair disadvantage with Uber.

With the age restriction, vocational licencing, medical examinations being required for taxi drivers, but not for Uber drivers, the government is behind the curve on this. I do agree that even Uber drivers should be required to go for a simple course and a basic medical exam for the safety of the passengers as well as the image of Singapore. The age requirement is a no-brainer, it should be the same, whether the government lowers or removes the age limit for taxi companies, or if they implement an minimum age limit to Uber-esque companies.

The government's role is ensuring a fair playing game, but as of now, Uber type services have a clear advantage over taxi companies and this is probably 50% of the reason why taxi companies are "crying foul".

However, the taxi companies too are way behind the curve. Their feedback system and ability to terminate drivers is unknown - whether it even exists and if it does, how does it work? Taxi companies need to figure out a way to get more competitive insurance rates for their fleets too. Their phone booking system is an absolute joke, running as if the world was still in 2005 (pre-smartphone era) while their marketing and penetration of any apps is completely laughable because no one knows that it exists. It would be even sadder if such apps exists since no one knows about it. What a waste of the PIC grant. The inflexibility of not always being able to make non-cash payments is a pain in the ass, especially when some cabbies still get angry if they have to break a $50 note.

While the government is half the cause of the simultaneous decline of taxis and rise of alternatives, they are definitely not entirely to blame. Taxi companies have become bloody obviously complacent about their business model and the business landscape that they operate in.

Where we go from here is fairly straight-forward and will happen in the months (not years) to come. The government will narrow the playing field advantage / disadvantage for the market players, which obviously can be only done in either of 2 ways - deregulating the taxi industry or increasing regulation for alternatives. Of course I am sure they will go the pragmatic approach and hit it from both sides. I am guessing an ease of the age limit, while putting in mandatory licencing and medical exams. "Passenger Chauffering Licence" sounds good. Give me some credit if you use that, okay

With that in place, the onus is on the taxi companies to wake up their idea. Unless they are willing to bite the bullet, invest in proper infrastructure to compete, they will continue on this fast track to industry extinction. They will die a somewhat pitiful but honourable death, since no one can blame the committee officials and referee for letting a rigged game continue to be played.

Personally as a consumer, I trod down the middle line. I have never used Uber because I don't really like surge pricing. I understand the reason behind it and I respect it, but I don't like it. Of course I have to be an exceptional snowflake that wants to pay the same or less than others, why wouldn't I? If I need to get somewhere in a jiffy or I can't afford the time variance of public transport, I will try to get a taxi. I still will flag down a taxi from the curb or wait in the taxi queue if its short (less than 6 people), but anything that will take me more than 5 minutes, I open up GrabTaxi and off I go. I guess I still find it slightly odd to take rides in Uber for now, but it taxi companies die, I guess I have no choice but to warm up to that idea.

What about you? Any thoughts on this rather important current issue? (innovation vs protectionism)
Which mode of transport do you mostly use outside of BMW (Bus, MRT, walking)?
Traditional taxis0%
Uber / GrabCar / GrabTaxi / Alternatives0%
Mix of both (depending on the situation)0%
I have a private car / motorcycle. I know not of your mortal problems.0%


  1. Not exactly a new post many of the points are basically in sync with what some taxi drivers are telling me during rides.

    1. Hey TI,

      From a cabby's perspective, it is a good thing because they now have very viable options if they are unhappy with the traditional taxi companies. For cabbies who can keep up with the technology and manage it well, they definitely stand to gain from the disrupting companies.

      However, from my perspective, I know quite a few people (under 30) who have started to drive Uber as a 2nd job. This means that they are not in the taxi business at all, but because of alternatives, they add capacity to the market. Except for peak hours, where demand outstrips supply, these casual drivers are definitely eating into the off-peak booking earnings which used to only belong to taxi drivers. More casual drivers working during off-peak hours means less rides for full-time drivers, especially since I would guess that casual drivers are less price sensitive and picky. Many are doing it partly for the novelty and experience, rather than purely as a grind job.

      One important point that I forgot to note in my post is about how alternatives are not able to do curb-side pick up, which is actually a pretty crucial difference.

    2. Agree with your analysis. My friend actually drove for Uber. Basically treats it as a car rental service, and earnings from Uber is only to cover the payments. The rest of the time he uses the car for his own personal reasons, freelance biz, etc. I have to say these disrupter services have significantly improved taxi availability for me. In some instances it is still near to impossible to get a cab though. I shld really try grabcar/uber one day heh.

  2. These private car sharing apps have actually made my life easier when it comes to flagging a ride. Many taxi drivers are becoming too choosy about their passengers and lazy too. I've met GrabCar drivers who drive from 9am to 10pm , but most taxi drivers tell me they drive only half day or less. My first choice is always GrabTaxi, but if I ring for any longer than 2 times and there's still no taxis, I switch to GrabCar and usually get them pretty quick on weekdays. Lesser time waiting = less frustration!

    1. Hey BB,

      Thanks for dropping by and sharing that strategy! So far, every time I've gone to GrabTaxi I have no problems getting an immediate match. However, I have never needed to use it during peak hour yet, and that's probably when it is the hardest to catch a cab! I have never used GrabCar before yet, but I'll give it a go the next time I can' get a hit!

    2. Lucky you! This morning I had to ring GrabTaxi for 10 minutes before I managed to get a ride. It was for my boyfriend's mum so GrabCar was not an option. Clicking on the Try Again button so many times and for so long left me super grouchy early in the morning at 9am!

    3. Lucky you! This morning I had to ring GrabTaxi for 10 minutes before I managed to get a ride. It was for my boyfriend's mum so GrabCar was not an option. Clicking on the Try Again button so many times and for so long left me super grouchy early in the morning at 9am!


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