March 24, 2009. Tuesday: The reality of taxi business in Singapore
My cabby friend who called me the other day about meter called me again today, and told me that he is going to switch to a $77 rental taxi. But he also said he is thinking about quitting. But quitting will cost him $300 in fines, and he has no other job to fall back on. I told him to hang on for a while, at least to see how the lower rental would pan out for him.
Again, the streets are full of taxis at night. Most of them are running around empty.
According to the government 2008 figures, of the 894,682 motor vehicles in Singapore, 24,300 are taxis. And there were 92,535 valid taxi drivers license holders at the end of 2007. I am sure it has since gone well over 100 thousand by now, or 3 in every 100 Singaporeans. I think that is probably the highest percentage in the world.
You may wonder: if the demand is not there, why there is still an oversupply? The answer lies in the fact that the taxi operating companies do not care about the demand in ridership. They only care about collecting rentals from the drivers. In the time of economic downturn, many people become jobless and they are the abundant source of supply of potential taxi drivers. The taxi companies recruit these people, train them, give them the license, and get them sign a taxi hiring contract for at least 6 months. In my case, if I quit within 6 months, I have to pay the company $300 for breaching contract. If I quit after 6 months, that is not a problem for the company either, as they constantly run the “training course” to recruit new taxi drivers. The government figures say that fresh taxi drivers’ license is given out at the rate of more than 5000 a year.
So, this is the reality of Singapore’s taxi industry today. The taxi operating companies do all they can to get every taxi of theirs rented out to drivers, no matter how the demand on the streets is like. As long as rentals are collected everyday, they can not care less how the drivers survive on streets.
You can’t blame them, though. All companies operate to seek maximum profit.
There is, however, something unique about taxi business. The taxi drivers’ license can only be issued to Singapore citizens. I don’t know any other jobs in Singapore that has this requirement. Even the strategically important agencies such as Temasek Holdings, which is responsible for safeguarding hundreds of billions of dollars of Singapore’s public wealth, do not require citizenship for their number 1 position. Therefore, either taxi driving is the most privileged job in Singapore, or it is the last resort to be reserved for Singaporeans when all other jobs shut them out.
The former is of course not true. It now makes perfect sense that taxi driving is the hardest, most tedious, and least paid, job for Singaporeans, as it is the last one available to them.
Posted by Mingjie Cai at 2:14 PM 0 comments
My cabby friend who called me the other day about meter called me again today, and told me that he is going to switch to a $77 rental taxi. But he also said he is thinking about quitting. But quitting will cost him $300 in fines, and he has no other job to fall back on. I told him to hang on for a while, at least to see how the lower rental would pan out for him.
Again, the streets are full of taxis at night. Most of them are running around empty.
According to the government 2008 figures, of the 894,682 motor vehicles in Singapore, 24,300 are taxis. And there were 92,535 valid taxi drivers license holders at the end of 2007. I am sure it has since gone well over 100 thousand by now, or 3 in every 100 Singaporeans. I think that is probably the highest percentage in the world.
You may wonder: if the demand is not there, why there is still an oversupply? The answer lies in the fact that the taxi operating companies do not care about the demand in ridership. They only care about collecting rentals from the drivers. In the time of economic downturn, many people become jobless and they are the abundant source of supply of potential taxi drivers. The taxi companies recruit these people, train them, give them the license, and get them sign a taxi hiring contract for at least 6 months. In my case, if I quit within 6 months, I have to pay the company $300 for breaching contract. If I quit after 6 months, that is not a problem for the company either, as they constantly run the “training course” to recruit new taxi drivers. The government figures say that fresh taxi drivers’ license is given out at the rate of more than 5000 a year.
So, this is the reality of Singapore’s taxi industry today. The taxi operating companies do all they can to get every taxi of theirs rented out to drivers, no matter how the demand on the streets is like. As long as rentals are collected everyday, they can not care less how the drivers survive on streets.
You can’t blame them, though. All companies operate to seek maximum profit.
There is, however, something unique about taxi business. The taxi drivers’ license can only be issued to Singapore citizens. I don’t know any other jobs in Singapore that has this requirement. Even the strategically important agencies such as Temasek Holdings, which is responsible for safeguarding hundreds of billions of dollars of Singapore’s public wealth, do not require citizenship for their number 1 position. Therefore, either taxi driving is the most privileged job in Singapore, or it is the last resort to be reserved for Singaporeans when all other jobs shut them out.
The former is of course not true. It now makes perfect sense that taxi driving is the hardest, most tedious, and least paid, job for Singaporeans, as it is the last one available to them.
Posted by Mingjie Cai at 2:14 PM 0 comments
