Monday, November 26, 2012

Use Carrots, Not Sticks

After numerous complains from the whining Singapore public, the Land Transport Authority (LTA) announced on Friday new taxi rules to improve the availability of taxis in Singapore. From next year onwards, taxi operators must see to it that 70% of their taxis are out on the road from 7am to 11m and from 5pm to 11pm.

They must also ensure that at least 70% of their taxi fleet clocks a minimum daily mileage of 250km. This will be increased to 85% in 2015. The LTA say the taxi-drivers should have no problem hitting the target if they drive at least 8-9 hours a day. Frankly, I think these rules sounds better on paper than they will in real life.

For one thing, the minimum daily mileage of 250km doesn’t make sense. The main complain of Singaporeans is the perceived lack of taxis during peak hours. Making taxi-drivers drive 250km a day is not going increase availability of taxis during peak period. More importantly, I find the new rules extremely unfair to taxi-drivers?

They are paying daily rent of about $100 for their taxis. Now not only they do they need to pay rent, they must also work a minimum of hours to meet a target of distance traveled. I mean the LTA say taxi-drivers should have no problem meeting the target if the driver at least 8-9 hours a day. That’s like office hours but the taxi-drivers got the added “bonus” of paying their taxi company $100 per day.

That just makes no sense. What I think the LTA should do is to have incentive to promote taxi-drivers to drive during peak period. Like things lowering the ERP for taxis between 12pm to 2pm and 4pm to 6pm, or fuel and rental subsidies to taxi-drivers if they drive during this period. These would be far better and more sensible than a blanket rule of distance traveled.

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