>THE much-criticised taxi service has been enjoying a period of calm, oddly after the operators raised flag-down fares and some surcharges in December. A data sampling by the two bigger taxi companies and the Land Transport Authority (LTA) records two important improvements: Riders can get a cab on demand much sooner in the downtown area and cabbies' earnings have risen, by up to 20 per cent, despite fewer passengers. The lower ridership in January of 9.5 per cent showed early consumer resistance, expected after the hike came in mid-December. February's figure of 934,000 was a bounce back to almost the same daily average of 945,000 for 2007, but the Chinese New Year seasonal factor could have accounted for the jump. Figures for March and April are awaited to give an accurate demand profile, although it is safe to assume discretionary taxi-takers are being forced back to the train and bus by the costlier fares. The use of correct pricing to turn taxis into a boutique service, not supermarket-type socialised commuting, is what The Straits Times has been advocating. The results so far are positive as they meet all three criteria of what a functioning market should have: Reliable service at a price the buyers will bear, decent income for drivers, a stable core demand. There have been fewer complaints from business people and shoppers, the main riders. The only consumer revolt that has interrupted the quiet of the period was over the requirement that passengers board and get off taxis only at designated stands. But this was the LTA's doing, not that of taxi operators, and the procedure has been much relaxed to eliminate the grotesque inconvenience to passengers.
Are commuters completely won over by the more proficient service? Is the pricing formula coming right? Answers to these critical market tests must wait for a more comprehensive evaluation of all-round service by the LTA. The taxi companies, chiefly the dominant ComfortDelGro, should be concerned at reports of longer waiting times on the fringe of the CBD, which form a part of the downtown area. A behaviour transference is not real improvement. Is service in the suburbs up to standard? Do cabbies still flash past waving heartlanders? Are they choosing whom to drive where? Most of all, is the midnight disappearing act still being enacted after the surcharge was staggered? We have long held the view that proliferating surcharges distort the pricing mechanism. They abet wilful misconduct by cabbies. A high starting fare with all surcharges removed, except the airport one, is a formula the taxi companies ought to study. The good results being achieved by the targeted December fare hike are a demonstration of what is possible.
