End of road?

PETALING JAYA: The conventional taxi industry may collapse in the next 16 months due to stiff competition from ride-hailing services Grab and Uber, which charge cheaper fares and enjoy other alleged unfair advantages.

Industry insiders said taxi companies are bracing for up to a RM60 million loss in revenue by the end of the year if the Land Public Transport Commission (SPAD) does not intervene to save the RM230 million industry.

A bumiputra taxi operator said the industry is experiencing a rapid fall, with a growing number of new taxis yet to be leased out and existing taxis returned by cabbies unwilling to continue driving.

“On average, it has been between RM15 million and RM20 million losses monthly across the industry. The business was bad post-GST. With Uber and Grab in 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 have them returned (by the drivers),” he said.

“RM2.5 million lost is just for one small company. Think about the big taxi operators and the whole industry, as there will be some 20,000 abandoned taxis in the coming months. Think about loss of income by taxi drivers and also taxi operators having to service bank loans and other costs,” he said.

Quoting his company, Abd Razak said around 20 taxis had been returned by cabbies since July and there had been no takers for 60 new taxis since early this year.

Checks by theSun at several cab company depots in Rawang, Selayang, Kepong, Ampang, Pandan, Seri Kembangan and Shah Alam revealed that around 1,600 taxis are parked within their premises.

At one of the major companies, Uptownace Sdn Bhd, its manager, who requested anonymity, urged the media to highlight the unlevel playing field between taxis and ride-hailing services.

“Please ask SPAD what it is doing by allowing Uber and Grab to operate illegally, without Puspakom inspection and other things,” he said.

A transport expert reckoned many taxi operators won’t survive beyond 2018 if the ride-hailing services continue to offer lower fares.

“Cheaper fare is the primary reason why many passengers are ditching taxis and switching 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 is not possible for taxi drivers to lower fares because of the cost factor, “while Uber and Grab are only acting as matchmakers using other people’s cars”.

Last week, effective Tuesday, Grab Malaysia announced a fare cut from RM1.30 per kilometre to RM1.10 in the Klang Valley during weekends (all day) and weekdays (non-peak hours).