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Friday April 26, 2013
THERE are about 12,500 Indian taxi drivers in the country and more than 5,000 of them gathered at the Murugan Temple in Batu Caves recently for the launch of a new loan scheme formulated by the Special Secretariat for Empowerment of Indian Entrepreneurs (Seed) and Tekun Nasional.
About 2,500 Indian drivers operate taxis using their own permits while the rest rent from companies, cooperatives or individuals.
The scheme provides financing for up to 20% of the cost of a new taxi and is meant to cover the down payment, which ranges between RM6,000 and RM18,000 per unit.
Drivers are unlikely to have the cash for the remaining 80% and would have to seek financing from taxi companies if denied by the banks.
Taxi companies charge higher interest rates for their rental-purchase facility than banks for the hire-purchase loans.
The former uses a daily rate method for simplicity and charges are waived for vehicle inspections and during festive holidays, plus an incentive for prompt payment.
Upon signing a rental-purchase or hire-purchase agreement, drivers are committed to repay the loan in a fixed number of years.
It would be preposterous to expect banks to provide EPF and Socso benefits to those who have taken hire-purchase loans but this is exactly what many drivers have been asking from taxi companies.
Banks may charge lower interest rates but many customers who default on car loans have been taken to court and they top the list of bankrupts in the country.
On the other hand, those who default with taxi companies would have their cabs repossessed or the drivers surrender them voluntarily and that would normally be the end of the episode.
Unknown to many taxi drivers, the Land Public Transport Commission (SPAD) has already arranged with Bank Simpanan Nasional (BSN) to provide easy loans at low interest rates to taxi drivers.
They may enquire with SPAD on this facility or directly with BSN before seeking financing from taxi companies, as many indirectly charge the outlawed “football money”.
The 20% financing by Seed and the balance by banks or taxi companies would no doubt be welcomed by the drivers but it would also create a new problem as it is never prudent for any business to be fully financed.
When drivers fall behind in repayments and the amount owed far exceeds the value of the vehicle, many of them would have no qualms ripping off passengers as there was little to lose.
It is ironical for taxi drivers to lament that life as a cabby is tough and yet choose to remain as one.
Those who wish to continue as taxi drivers should accept the inherent conditions and challenges of the job, and not try to justify their undesirable behaviour.
Many of those who turned up at Batu Caves were hoping for some good news on individual permits as about 10,000 Indian drivers are renting taxi permits.
They will be disappointed to learn that there are more than 12,000 applications for the 800 permits to be released over the next few months.
The average rate for renting a taxi permit is RM18 per day inclusive of third-party motor insurance, road tax and vehicle inspection fee.
As such, getting their own permit would mean a saving of around RM500 monthly, but this amount is easily wiped off with more taxis on the road.
Efforts to help taxi drivers may be sincere but the programmes need to be more holistic in order to truly benefit the long suffering cabbies.
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