So Comfort wants to increase cab fares from next week, which has drawn the usual howls of protest from various quarters. But do those protesting really understand what they’re protesting?
1. How dare you not consult us before increasing fares?
Consultation sounds nice in theory, and it works for areas where public or industry feedback is useful, such as new proposed legislation or amendments to existing laws. But when it comes to price-related issues, does it have a place at all?
Do you honestly expect any end-user to agree that prices should go up? If all that consultation will create is negative feedback, what is the point? It’ll be a waste of time for both companies and consumers.
More importantly, in a market economy, companies do not “consult” customers on price increases. Your chicken rice hawker does not consult you when he decides to raise his prices, does he? Neither does your mobile operator, or your school textbook seller, or any other service provider for that matter. Why do you expect taxi companies to consult you? What’s so special about taxi companies that you think they should consult you?
2. You should increase capacity before increasing fares.
This is so hilarious it would be funny if it didn’t come from an NCMP backed by a 15-man choir. First, as a profit-seeking company, do you not think that Comfort would want to increase revenue-earning capacity if it could? Is it possible that they don’t have enough taxis and drivers to begin with?
Second, who controls capacity? Is it the Govt, through the COE system, or is it Comfort? If the former, why wait till now before raising such an issue? She (or Mr Chiam before her) could have made this point long ago.
3. Comfort should charge less for rentals, make less profit, etc instead of increasing fares if it really wants to help taxi drivers take home more.
I haven’t heard anyone say that Apple should charge less for its iMacs/iPads/iPhones or even that Singtel/M1/Starhub should charge less. Yet you want Comfort to earn less, so that it can give more away to taxi drivers.
Well, Comfort is not a charity. They are not in business to earn less. Frankly, they will and they should try to earn as much as possible given the constraints of competition, else they should not be run as profit-oriented companies.
So are you asking for Comfort, and other taxi companies in general, to be constituted as non-profit organisations? Or are you asking Comfort, and other taxi companies, to see their “social” mission and not satisfy their shareholders’ demands for higher earnings and dividends each year?
Or perhaps you’re asking the Govt to control how much profit-oriented companies should earn?
Do any of the above make sense to you, if you are the owner/director/shareholder of a taxi company? If that makes sense to you, why don’t you tell car dealers to cut their profit margins so that car salesmen can take home more? Or why not ask property developers to earn less so that their builders, subcontractors and even their property agents can earn more?
4. National Taxi Association engaged in price-fixing behaviour, why is CCS not taking action?
First, I don’t think NTA has engaged in price-fixing behaviour, despite its “urging” other taxi companies to follow suit. Why? Because clearly, no one else has yet matched taxi prices from Comfort, and it is not clear that they will.
Second, CCS has taken action. From CCS’ past enforcement actions, it should be clear by now that actual price fixing has to occur before CCS imposes fines. Nevertheless, CCS has warned NTA not to engage in actions that could lead to price fixing. And that’s about all it can do at this stage, until evidence can be obtained showing price collusion.
Third, and most important– even if all taxi company prices are raised to exactly the same level as Comfort, can anyone prove that is a result of price-fixing? That’s the difficult question constantly facing CCS. If it were so easy, then all petrol companies would be in trouble already.
5. Why is the Govt not doing anything about this?
Do you understand that taxi fares are now deregulated? Do you know what that means?
It means taxi companies can set whatever fares they want, and the Govt cannot interfere.
Of course, we know the Singapore Govt is powerful and can get local companies to do pretty much whatever it wants, but what is the point of “deregulation” if the Govt still tries to control fares?
So when you ask why the Govt is not doing anything, are you asking the Govt to reverse its policy of deregulation? Do you want the Govt to regulate taxi fares? Do you even know why taxi fares were deregulated in the first place?
Note: I’m not pooh-poohing the idea of taxi fare regulation per se. In fact, I think regulatory oversight on taxi fares in an oligopoly situation deserves study. But those who criticise the Govt for not doing anything need to understand why the Govt is currently not doing anything, they have to understand why fares were deregulated in the first place, and they have to be clear what they’re asking for.
6. This is some PAP/Temasek/NTUC plot to bleed the people dry
This is an unfortunate consequence of Singapore Inc.
Nobody smells a conspiracy theory when Apple raises prices for its computers/mobile phones, when Nikon/Canon/etc raise prices for cameras/printers, or airline companies raise airfares, etc.
But whenever any GLC raises prices– it’s always a Govt plot, at least in the eyes of some “opposition” politicians.
Is it remotely possible that what the Govt says is true– that it does not interfere in the commercial decisions of GLC’s.
Is it remotely possible that this Govt is not stupid, ie that it knows that every price increase by GLC’s can potentially cost it votes.
Put the two together, is it remotely plausible that the Govt is out to lose as many votes as possible by getting its GLCs to bleed Singaporeans dry? Or is it more likely that Comfort arrived at its decision to raise fares on an independent basis, which it felt was necessary to keep abreast of the huge increases in diesel prices since 2007 (when fares were last increased) and to enable taxi drivers’ take-home pay to match the huge price inflation of the last five years?
No doubt Comfort directors and management may have sought the Govt’s “blessing” before making their announcement, but which scenario is more likely? The Govt ordering Comfort to bleed people dry, or Comfort asking for the Govt’s tacit “permission” to raise fares due to the economic circumstances?
7. What about the needy, the pregnant, the disabled, etc? Higher taxi fares will hurt them!
Much as I sympathise with the needy, taxi companies are not charities. You should take your feedback to the Govt to ask how they can help such groups. I fail to see its relevance as a response to Comfort.
Taken to its logical conclusion, your criticism means fares should either never be increased, or taxi companies should provide substantial discounts off normal fares to such passengers.
Is that what you’re really asking for? Is that really practical? Do you think a taxi driver will want to continue in his profession if fares can never be increased despite inflation? Would a taxi driver ever want to pick up a disabled, pregnant or elderly needy passenger if he has to give a 50% discount from the metered fare compared to picking up a normal passenger? Would you?
Do you understand what you’re really protesting?