Taxi driver aid and its ramifications

TAXI drivers exiting rental-purchase agreements, often described as the pajak model, will be granted RM5,000 each for the purchase of new taxis, as announced in the recent budget.

The RM60 million allocated in this scheme will benefit 12,000 taxi drivers.. Similarly, SOCSO will provide a safety net for those eligible.

Those receiving benefits will no doubt be happy initially, but others not entitled might be bitter, including large numbers of self-employed people like petty traders and hawkers.

The giving out of handouts have more ramifications than one can imagine.

For example, very few people are aware that 57 percent of all taxi permits in peninsular Malaysia are owned by individuals, and many of these permits are rented out, some together with the vehicle.

Drivers who rent such individually-owned permits or taxis without a rental-purchase agreement would have difficulty showing evidence to qualify for the RM5,000 grant.

On the other hand, taxi companies and cooperatives have allowed thousands of people unable to obtain permits, or who do not qualify for one, to drive taxis.

Similarly, they have also provided vehicle financing to drivers with individual permits but are unable to obtain or qualify for bank loans.

The risks for financing taxis are much higher than private cars, as the third party cover preferred by nearly all taxi drivers does not insure the vehicle for accidental damage or theft.

Should the taxi be a total wreck or get stolen, the driver would lose the deposit and installments paid. The rest would have to be borne by the taxi company.

A daily rate is used to calculate the monthly installments, which includes the permit rental for RM500-RM600 monthly and repayment for the loan with high interest.

Some taxi drivers would complain of the high ‘daily rental’ they are paying, without taking into account that it includes repayment for the loan as they get to own the vehicle.

They are customers of taxi companies, just like private car owners are for banks that provide hire-purchase financing.

Some even demand taxi companies provide EPF and SOCSO benefits, which must be the only group of self-employed people to do so.

While the self-employed may voluntarily contribute to EPF, it remains to be seen how SOCSO can be extended to taxi drivers. If so, what about the many more self-employed in the country?

It would be wiser to help taxi drivers get out, than remain, in a low-income trap.

Intervention is needed to get them to change their ways as many are too used to waiting and idling, which would get worse once services provided through ride-hailing apps are allowed to operate.

Many could be trained to become bus or truck drivers and earn higher and more stable income.

Moreover, the road transport industry is acutely short of good drivers, and those professionally trained to operate expensive buses and trucks are highly paid.

However, those who drive taxis for side income, pocket money or to pass time, should be allowed to continue as they serve a section of the population that do not bother to book a taxi.

Most passengers using their smartphones would choose ride-hailing over the dozen taxi apps available locally, simply because the former is cheaper than regulated taxi fares.

Yet, we continue to hear ministers telling taxi drivers to switch to technology, and the public calling on cabbies to be competitive by improving their service.

The reality is that ride-hailing apps will always be more popular as long as their rates are lower and drivers are in their best behaviour when passengers use mobile apps.

Compelling private car drivers to obtain a public service vehicle licence or driver’s card is necessary to regulate ride-hailing services.

Controlling the number of part-timers would be welcomed by those working full time as well as taxi drivers.

This is critical as altercations are likely to occur when more and more private car drivers are taking passengers away. Many taxi drivers are in a dilemma whether to make the switch.

YS CHAN

Kuala Lumpur