Have you ever wondered why you are never able to get a taxi during certain times of the day in Singapore? Have you ever wondered why the taxi drivers are always complaining? Are the incentives really that bad for them? Gathering some anecdotal evidence coupled with economics and physics, I seek to analyze the cultural phenomenon of taxi cabs in Singapore. At the end, he presents a solution based on free market and competition to how the problem might be solved. Presented in Blinkbl-nk on 20 June @ Blu Jazz, Singapore: http://blinkbl-nk.com/

1. A Flat Fee Suffices
Taxi Cab Phenomenon in Singapore
Bernard Leong
@bleongcw or http://bernardleong.com
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2. Outline
• Why are things the way they
are? Three perspectives:
policy makers, customers &
taxi drivers.
• What is the problem?
Demand & Supply, Perverse
Incentives, Random Walks.
• How do we really solve the
problem?
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3. Taxi Drivers in Singapore
What Taxi Companies What Customers want
What they want to do
think they do them to do
What LTA hope they do What we think they do What Taxi Drivers think they do
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4. The Policy Maker
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5. General Numbers
Taxi Population: 3%
Average Passenger
Trips (Taxis): 933K
Sources: LTA: Public Transport Figures, Updated as of April 2012
http://www.lta.gov.sg/content/lta/en/corporate/facts_figures/statistics/public_transport.html
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6. Taxi Brands in Singapore Breakdown
Others
Premier 6%
8%
SMRT
12%
Comfort & City Cab
58%
TransCab Operating Profit
16% on Taxis
Comfort-Delgero
(Annual Report 2011):
S$216M
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7. Public Transport Ridership
4000
MRT Bus Taxis
Average Daily Ridership (K)
3000
2000
1000
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Year
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8. The Customer
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9. Let’s start with us, the customers ...
• How many of you have taken a taxi in
Singapore?
• Have many of you encountered a taxi driver
who often complained, “Life in SG sucks”?
• Have many of you encountered a taxi driver
who tells you that he or she is a new driver?
• Have you often wondered why you cannot find
taxis during certain hours in the day, for e.g.
5-6 pm, 9-11.30 pm?
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10. Questions I typically ask ...
• How many hours do you drive a day?
• What’s the rental rate and petrol you pay per
day?
• How do you pick up customers?
• What’s the take home pay per month?
• Why are the taxi drivers <state problem>?
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11. My Typical Complaints on Cab Drivers
(Out of 10)
“I am a new driver.”
“They do not know the route”
Keeps talking despite the customer
wants some peace and quiet
“Complaining about Singapore Government.”
0 2 4 6 8 10
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12. How effective are the taxi drivers?
SMS (71222) Call
100
75
%
50
25
0
3-5 5-7 7-9 10-12
Time Taken for Taxi Cabs to arrive at destination
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13. The Taxi Driver
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14. The Taxi Driver’s Daily Account
Expenditure (S$) Revenue (S$)
Average Rental Price of
$90.00
Cab*
Average cost of Petrol (or
$80.00
Gas Cost) per day
Miscellaneous Costs $40.00
Average Earn-out (12 hours
$360
shift of S$30 per hour)
Profit Earned per day $150
Earnings per month
$3,000
(20 Days of Work)
*The rentals are based on averages of the prices for rentals for either petrol or gas cars
** On average, most taxi drivers I have spoken to reported about $60-$100 petrol or gas depending on fluctuating prices.
For more details of daily rentals, check out: http://www.taxisingapore.com/taxi-drivers/daily-rental-rates/
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15. The Taxi Driver’s Tactics
• Random: Pick up the customers in designated points
or anywhere upon the last destination.
• Gaming the system: Take calls & no picking up of
customers only during peak hours or dead zone times.
• Directed: Pick up the customers only at profitable
entry points such as Changi Airport Terminals or
casinos.
• Fixed Customers: Customers who pay them a fixed
fee and require them to ferry at certain times of the
day.
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16. Why is it hard to call a cab at certain times of the day?
Demand & Supply
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17. Why are cabs flashing “On Call” or “Hired” during certain hours
with so many people trying to hail cabs in the city?
Perverse Incentive
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18. Why are cabs queuing at these places?
Directed Random Walk
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19. Where does all this lead to?
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20. The interests of the customers,
policy makers & taxi drivers are
not aligned.
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21. 21

22. My solution: Impose a higher flat fee, say $5.50 with
no special surcharges.
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23. “Reality is not a matter of opinion. Raw opinion
is like math errors or typos - understandable
human error but uninformative. To err is human,
to understand is hard work”
- Alan Reynolds, “Income & Wealth”
@bleongcw
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