When I first read that Uber was landing in Malaysia some time ago, I knew this is not a child’s play. It’s going to be a massive revolution and as usual, you will see blood shed when the fight is against the giant old institution. This is not just a Malaysian thing because you can see cabbies in London, Madrid, Paris and Berlin staging protests against Uber. They will tell you lots of reason to suggest a ban on Uber but ultimately it boils down to the loss of income for most conventional taxi drivers. I heard that a taxi license is not easy to come by because it costs a bomb to obtain and in some cities, you need to bid for it in auctions because the number is limited. In our country, according to some sources, the taxi permits are granted to well connected cronies who then sublet to thousands of drivers. We are pretty clear what the old establishment is — old, fat rent-seekers and their army of ordinary folks working their asses off to make a living. Now, put this picture in your mind.
On the other hand, Uber represents the latest innovation that most people love. It’s convenient and easy to use and users can now arrive at their destination in style. Like it or not, it’s spreading like wild fire especially with the launch of UberX, the cheaper version which potentially put the last nail in the coffin of the taxi industry. Some people think we are going to watch the battle involving David vs Goliath, but I think we are seeing a foreign Goliath vs local Goliath. Uber is not really a small fry as it’s backed by famous investors like Goldman Sachs, Google Ventures, Jeff Bezos (Amazon.com founder), just to name a few. It recently raised $1.2 billion, giving it a value of $17,000,000,000. That’s freaking lots of zeros and to put it in another perspective, this 4-year-old company is worth about the same as our CIMB Group with 90 years of history!
To me, the existence of Uber is mainly on willing-buyers-willing-sellers basis. What’s wrong with that? As you can tell, I’m more on the pro-capitalism side and I prefer to let the market become the judge. Now taxi companies, behaving almost like the MAS union, have asked the Land Public Transport Commission (SPAD) to ban Uber. On what grounds?
1. Uber does not have a taxi permit issued by SPAD and it is also believed that its drivers do not have the public service vehicle (PSV) licence – this will cause many problems to the passengers in the event of any untoward incidents, crime cases or road accidents.
That’s quite a lot of bullshit crammed into one sentence. First of all, Uber was launched in November 2013 and why only complain now? The reason is pretty obvious. Uber first launched UberBLACK with a high price tag for every ride because they use cars like Toyota Camry, Nissan Teana and BMW 7-Series. So the taxi companies thought, “Chiu! KL people so cheapskate sure won’t use Uber lahh, give it 3 months it will close shop for sure”. What happened next was public knowledge. Uber not only survived but has been growing fast, so fast that now it has launched UberX which promises 15% cheaper fare compared to normal taxi. This is when the cabbies start talking about crime and accidents in such a noble manner.
I believe Uber would have applied for the relevant permits if the permits are open for application without having to deal with all the under table gestures and cumbersome red tape. If not mistaken, Uber is partnering with the local limousine companies and I would imagine they have the required license to take passengers.
Well, does the licensing really protect the passengers? Take a survey and you generally find that people feel safer being in an Uber vehicle because of the driver’s background check and user review system. I’m not saying it’s 100% fool proof but it’s still better than the ambiguous taxi licensing procedures undertaken by the authority. There are tonnes of horrible experience with taxi drivers despite having proper license. The most outrageous story I heard from a friend is that the taxi driver masturbated himself while driving her home at night.
To be fair, I have come across an equal share of really good taxi drivers and the unscrupulous ones. There are lots of very nice taxi drivers out there who deserve my respect. At the same time, these drivers are bothered by the high cost of maintaining their permits, which often force them to work over time or speed through traffic to increase their turnover. I’ll talk more on the taxi license cost later and you will understand me.
2. Uber’s services have affected the income of taxi drivers in the Klang Valley as the company fixes its fares based on its estimation on the distance and time of service.
Now we are heading straight to the main issue. If they think by fixing fares based on distance estimation and time of service will provide an advantage, then just do the same for taxi lahhh. By the way, there are so many taxi drivers doing that anyway because they refuse to use the meter and they usually accept your ride only if the traffic and time of service is good enough for them. In the meantime, Uber drivers are required to take you to anyway you wish. So far I have not heard about driver rejecting a ride.
How you do well in the taxi industry is not just about having the right fare but providing excellent customer service. Most of the time when I hopped on to a normal taxi, the driver’s sour face made me feel like I owe him something. At the same time I had to worry about getting ripped off. On the other hand, Uber drivers greeted me with a smile and even asked if the air-conditioning temperature was fine. Suddenly I could see rainbow in the sky. Ok that’s exaggeration.
Uber should be there as a wake-up call to the taxi drivers. I care less about how they fix the taxi fare because I can refuse a ride if meter is not used. What I want is a decent experience of being treated with respect in a safe environment.
3. Uber service providers do not have to bear the various operational costs that normal taxi drivers do, like having to undergo periodical Puspakom inspections.
Every taxi must go for Puspakom inspection every 6 month which costs RM55, and that’s RM0.30 of extra cost per day compared to an Uber car. However, most taxi run on natural gas which is way cheaper than petrol cars used by Uber.. Based on data in Oct 2013 (I assume no significant changes since then), a petrol car costs 23 cent/km to operate whereas a Natural Gas Vehicle (NGV) costs 11 cent/km, a huge 12 cent/km difference. In order to cover the Puspakom cost of 30 cents per day, a taxi driver needs to drive at least 2.5km every day. Any mileage above that a taxi driver is actually at an advantage. Think about it, as a taxi driver if you drive less than 2.5km per day, maybe you should consider other job.
Meanwhile, Uber service providers still have to bear significant overheads because they need to employ drivers and service their cars regularly even if their drivers are sleeping during the day. Now the key issue is cost and we should make both parties compete on the same level playing field, fair and square!
Most people talk about vehicle inspection for Uber and I’m sure it’s happy to do it for public safety. Come on, what difference is 30 cents per day going to make? The main focus is not to make Uber more costly but to lower down the cost of operating a taxi.
Correct me if I’m wrong but here is what I know. Taxi permits are mostly granted to cronies who then rented to drivers for at least RM20 per day. If the driver is granted the permit directly by the authority, it only costs them RM0.70 per day to maintain the license and permit. Assuming RM0.30 of administrative cost, the fucking cronies get RM19 for doing nothing. For those drivers who can’t afford to buy car, they are forced to buy lousy Proton car from the cronies bundled with the taxi license. That will cost them RM50-60 per day and even higher if you want to pick up passengers from popular places like airports. This is what we call daylight robbery which is perfectly legal.
Suffice to say that the most logical solution is the dismantling of such rent seeking cronyism or at least get the cronies to lower down their taxi permit rental. The mandatory licensing of Uber car will most likely enrich another group of cronies who monopolise the new permits. Then the vicious cycle continues with the drivers and public at the losing end.
4. Koperasi Pengangkutan Putrajaya dan Cyberjaya honorary-secretary Mohd Salleh Mat Zin said, “Licensed taxi operators have to pay insurance premiums that are four times higher than those for private vehicles, which are aimed at ensuring the safety of passengers and other road users in the event of accidents.
Another cost issue. Hmm…I just quickly checked that insurance for a taxi (say RM50k) below 1,400 cc is RM2,400 more expensive than the equivalent private car, which is 2.6x more expensive. Can I suggest taxi permit rental to reduce by RM6.50 per day and daalaaaa….taxi driver is back to the level playing field! By the way, since Uber providers are limousine companies, I’m not sure what class of insurance they use. If they are using “Hire Car – Chauffeur Driven” class of insurance, that’s in fact RM1,800 mofe expensive than a taxi insurance! Hmm…I need an insurance expert to verify this.
Commercial vehicle insurance is generally more expensive because the vehicles spend more time on the road and has higher chance of getting into accidents. Some may extend the liability to cover the passenger but how does this ensure the safety of passengers/public in the event of accident? The only impact to me as a passenger is whether I get compensated if some bastards hit me. Honestly speaking, who gives a fuck? Taxi and Uber cars are used to commute within the city with such a low risk of life-threatening accidents as opposed to long distance travel. In fact, I might feel safer in an Uber car because the driver will be more careful with his driving. That’s because he knows that his private car insurance may be void in the event of accident when ferrying passengers on commercial basis.
“The Uber service, however, does not give any indication whether its vehicles are covered by insurance,” added Mohd Salleh.
This is what I call a punch in the air. If Uber vehicles are not covered by insurance, how can it renew its road tax? Or is he suggesting that they operate without road tax? What’s next? Stolen vehicles?
TechAttack.my interviewed Uber regional GM Michael Brown at the launch of UberX a few weeks ago. Brown says that its highest priority remains to be rider safety and satisfaction, hence each driver undergoes Uber’s screening process during hiring, which includes a criminal background check, driving history check, as well as an ongoing quality assurance via rating system (rated by passengers). Brown says if a certain driver’s ratings aren’t up to par, Uber can end the relationships with them. He also says Uber cars are covered by insurance for both the driver and passengers.
Taxi drivers are bunch of hard working ordinary folks. I personally don’t want to see them losing their job and the industry should not be shaken just for the sake of change. At the same I love innovation and fair competition. Banning Uber is just protecting the rich cronies at the expense of the public and the taxi drivers have no chance to improve their lives too. If I’m a taxi driver, I want to learn how to sign up to Uber and ride on the wave. Knowing that most of them are not technology savvy, they should all at least unite and push for lower taxi permit rental or even force the government to fuck the cronies. Such an idealistic opinion..haha! Well, I know I know, it’s all about politics and there is no straight answers.
Constantly evolving, now UberPool offers fare split to cut your cost even further. This exciting because it’s really crazy, competition can be really ruthless.