Disruptive innovation a boost for taxi industry

ALMOST all businesses have been affected, some disrupted, by new technologies but none has responded more vocally than some of our local taxi companies and associations.

On Aug 15, Uber announced in its blog that it has collaborated with Quick Ride Sdn Bhd and Koperasi Amanah Pelaburan Bhd to offer Proton cars for lease to drivers.

Unlike conventional taxi companies that require several thousand ringgit as down payment, the security deposit for leasing the Uber cars is only RM1,000, and rentals for Proton Saga at RM45 per day and RM10 more for the Proton Persona.

In response, Big Blue Taxi founder Datuk Shamsubahrin Ismail accused the Land Public Transport Commission (SPAD) of propagating the leasing system after pledging to eliminate it under the Taxi Industry Transformation Programme (TITP).

The accusation was flawed, however. Firstly, the new leasing scheme is a business venture that does not require SPAD’s approval and the Commission played no part in launching it.

Secondly, the rental-purchase scheme, commonly known as “pajak system”, would be strengthened and standardised under the TITP to protect taxi drivers.

Eliminating it would force taxi companies to close down, and that was never the intention as they play a crucial role for drivers, especially those who are unable to secure permits or loans to buy their vehicles.

Under the TITP, selected drivers are issued individual taxi permits and some qualify for RM5,000 cash grant for the purchase of new vehicles. When there is a sufficient number of taxis in the market to compete with private cars operating under Uber or Grab, passengers would stand to benefit.

When supply and demand is determined by market forces, the result would be a healthy taxi industry that encompasses licensed taxis and private cars providing e-hailing services for both locals and foreigners alike.

Since Uber was introduced in the local market some three years ago, unhappy taxi drivers have either switched to other jobs or started driving private cars under e-hailing, and the number of new taxi drivers is getting smaller.

As such, taxi drivers enjoy seve­ral options, making the role of taxi associations even more redundant.

Most cab companies are already resigned to the fact that the taxi market has been transformed and they no longer get to enjoy a golden harvest.

Thus, anyone accusing the new leasing scheme of being old wine in a new bottle would appear to be more like crying over spilled milk.