IN AN unprecedented move, taxi companies have asked the Land Transport Authority (LTA) to suspend tax payments on their unused taxis, as more and more cabbies are seeing their taxis repossessed.
Industry sources say there are more than 1,000 cabs - a higher than usual number - waiting for potential drivers, out of the 24,000 registered taxis.
Representatives from the six cab companies met LTA officers last Thursday to discuss the difficulties the companies are facing during this economic downturn.
To save on operating costs, they are considering laying up their unused taxis.
Laying up a vehicle means road tax payments are temporarily suspended and the clock on certificates of entitlement (COE) is stopped as well.
Take, for example, a six-year-old 2,000cc Hyundai Sonata taxi.
If it were to be taken off the road for a year, stopping the clock would mean there would still be four years left on its 10-year COE instead of three.
The company would also not have to pay road tax of $1,020 for the year and a $5,100 special tax.
The extra concession being sought is that the vehicle retains its scrap value while it is laid up. This is not the case now under current LTA rules.
If the proposal is approved, the industry as a whole is likely to save about $5million over a six-month period, assuming there are 1,200 unused taxis.
LTA said it is still assessing the proposal and nothing has been decided at this time. The Straits Times understands that the proposal was an effort led by the smaller players - Premier Taxis, Prime Taxis, Smart Automobile and Trans-Cab - which are feeling the pinch of not being able to rent out their taxis.
Smart, with about 800 taxis, says the number of unhired taxis has risen in recent times to just under 10per cent now.
Company managing director Johnny Harjantho said: "If LTA approves the proposal, then whatever rebates we get, we can channel part of it back to the drivers to help them out."
ComfortDelGro, the largest operator here with about 15,000 taxis, says its number of unhired cabs has remained fairly consistent at 3per cent.
SMRT Taxis, the second-biggest player with about 3,000 cabs, said its rate had increased slightly.
It added that if the proposal were approved, it would help the firm cut operating costs, which are higher than last year due to the spike earlier this year in diesel prices.
Mr Harjantho said that while he hoped the proposal would be approved "as soon as possible", the other key consideration was how to win back passengers.
"We don't blame the drivers...we know that it is really a tough time for them," he said.
He suggested that the fare structure be reassessed, especially the 35per cent peak hour surcharge which was introduced last year.
Comfort, which usually takes the lead in any fare changes, said it was monitoring the market situation.
This article was first published in The Straits Times on Nov 27, 2008.
