Taxi industry might collapse in 16 months

PETALING JAYA: Conventional taxi industry might collapse in the next 16 months due to cheaper fares and the alleged unfair advantages currently enjoyed by Grab and Uber services.
Industry insiders said taxi companies is bracing to incur up to RM60 million lost in revenue by end of the year if Land Public Transport Commission (SPAD) do not intervene to save the RM230 million industry.
A Bumiputera taxi operator said the industry is experiencing a rapid fall with growing numbers of new taxis yet to be leased out and taxis returned by cabbies due to stiff competition from Grab and Uber.
“On average, it has been between RM15 million to RM20 million lost monthly across the industry. The business was bad post-GST. With Uber and Grab into the picture, we are suffering even more,” said Avenue Drive Sdn Bhd managing director Abd Razak Abd Aziz.
"Take for example, a new Proton Persona taxi with a cost of RM50,000 each. Imagine, if one operator cannot lease out 50 Persona taxis or having them returned (by the drivers),” he said.
“RM2.5 million lost is just for one small company. Think about big taxi operators and also the whole industry if there will be 20,000 abandoned taxis in the coming months. Think about lost of income by the taxi drivers and also, taxi operators having to service bank loans and other costs,” Abd Razak pointed out.
Under his stable, he said, around 20 taxis have been returned by cabbies since July and no takers for 60 new taxis since early this year.
Checks by theSun at several cab companies depots in Rawang, Selayang, Kepong, Ampang, Pandan, Seri Kembangan and Shah Alam have revealed that around 1,600 taxis are parked within their premises.
One of the major companies in Klang Valley, Uptownace Sdn Bhd manager (do not wish to disclose name) who declined to comment on the high number of new taxis sighted at its stockyard in Seri Kembangan urged the media to highlight unfair level playing field currently enjoyed by Uber and Grab.
“You should ask SPAD, what is the commission doing with the taxi situation by allowing Uber and Grab to operate illegally, without Puspakom inspection and other things,” said the Uptownace manager.
A transport expert reckoned many taxi operators won’t survive beyond 2018 if the ride-sharing app services continue to offer lower fares.
“Cheaper fare is the primary reason why many passengers ditching taxis and switch to Grab or Uber. It is already affecting cabbies and taxi operators badly,” said Malaysian Association of Tour and Travel Agents liaison manager Y. S. Chan.
He explained it was not possible for taxi drivers to lower fares because of cost factor, “while Uber and Grab are only acting as a matchmaker using other people’s cars.”
Last week, Grab Malaysia announced fare cut from RM1.30/km to RM1.10/km in Klang Valley during weekends (all day) and weekday (non-peak hours) effective last Tuesday.