- Joined
- Jan 23, 2010
- Messages
- 1,746
- Points
- 0
one National University of Singapore study supervised by transport economist Anthony Chin found, have a target take-home income. Once they have achieved it, they either call it a day, or take it easy. Enhancing surcharges will only help these cabbies reach their target earnings faster.
So it remains to be seen what effect the new surcharges will actually have on the ground.
In the meantime, however, the country will be left to deal - more than ever - with the distortionary economic effects of surcharges.
Whoever devised surcharges meant well. In theory, surcharges help to target specific areas or periods of time when supply does not meet demand adequately.
In the case of the Singapore taxi industry, however, the reality is that surcharges have only given rise to yield-maximising behaviour on the part of cabbies.
Better known distortions that customers know all too well include:
cabs disappearing before midnight,
taxi queues growing longer as empty cabs cruise in nearby lanes waiting for phone bookings, and
a supply void that materialises at the same time at dawn and dusk as every driver changes shift at the same time (to allow the next driver a fair shake of the next peak surcharge period).
And we have not even factored in the messy confusion that tourists are faced with every time they pay for a cab ride.
Is it time, therefore to 'reset' the system here?
So it remains to be seen what effect the new surcharges will actually have on the ground.
In the meantime, however, the country will be left to deal - more than ever - with the distortionary economic effects of surcharges.
Whoever devised surcharges meant well. In theory, surcharges help to target specific areas or periods of time when supply does not meet demand adequately.
In the case of the Singapore taxi industry, however, the reality is that surcharges have only given rise to yield-maximising behaviour on the part of cabbies.
Better known distortions that customers know all too well include:
cabs disappearing before midnight,
taxi queues growing longer as empty cabs cruise in nearby lanes waiting for phone bookings, and
a supply void that materialises at the same time at dawn and dusk as every driver changes shift at the same time (to allow the next driver a fair shake of the next peak surcharge period).
And we have not even factored in the messy confusion that tourists are faced with every time they pay for a cab ride.
Is it time, therefore to 'reset' the system here?