Taxi industry shake-up can benefit economy, society

Taxis at the Lucky Plaza taxi stand.
Taxis at the Lucky Plaza taxi stand. PHOTO: ST FILE

While I sympathise with taxi drivers because they may have to work harder to generate the same level of income, the latest fare cuts by Uber and impending changes by similar companies can contribute to overall benefits and growth of the economy and society ("Fare cuts by Uber, Grab will hurt sector: Taxi body"; April 24).

Looking at the bigger picture, there is adequate evidence to show that competition can help to improve value creation and productivity of industries and enterprises.

For example, the reduction of prices may enlarge the market for taxi commuters. As a result, this can contribute towards helping Singapore build a car-lite culture.

It can lead to the freeing up of spaces to develop a more beautiful, people-friendly and lovable environment that can cater to and enhance different livelihoods and lifestyles.

The enlarged market can also contribute to more business and, thus, increase the income of taxi drivers.

Commuters can benefit from having more choices, lower prices, and better services.

Instead of focusing on the downsides of new entrants to the taxi industry, incumbents should realise that they cannot stop technologically driven changes and improvements.

They should use the opportunity to improve their business models so as to increase value additions to commuters and taxi drivers.

They should rationalise their operations and enhance their productivity and innovation, including using Big Data analytics to improve their results and service.

On a national level, the Government should revisit some of its policies, such as requiring taxi drivers to be on the road during peak hours and clocking a minimum daily mileage of 250km.

In the new economy, it's not just about the quantity of working hours, but the quality of service in responding to the needs of commuters promptly, financially and professionally.

Whichever way we look at it, adopting a commuter-centric and well-run business model, supported by the latest proven technology, is the way to go, to turn Singapore into a smart city that is both lovable and liveable to all stakeholders.

Patrick Liew Siow Gian (Dr)

A version of this article appeared in the print edition of The Straits Times on May 19, 2016, with the headline 'Taxi industry shake-up can benefit economy, society'. Print Edition | Subscribe