Urban cabbie Andy Kam Kam-wah, 40, says he believes the fare reductions for New Territories taxis, which come into effect this Sunday, could open the door to more positive changes for the embattled trade. Ride from Tsim Sha Tsui to Po Lam. Cost: $83.60
Fare reductions for the taxi industry have always been a contentious issue because it creates a domino effect on other components of the trade. When the fares come down, so will the price of the taxi operating licence. For example, a fare reduction of 20 per cent would mean a parallel drop of 20 per cent on the price of a licence. An urban taxi licence, which is now worth around $2.7 million, will have its value trimmed by at least $500,000. So as you can imagine, taxi operators have to balance many factors when it comes to considering fare adjustments.
There is never a simple and straightforward solution. They have to analyse whether it is acceptable to absorb a short-term drop in the value of the licence by bringing down fares in order to stimulate business, or whether it is worth staying put until the economy gets better.
I think the coming fare reduction for New Territories cabs is a real test case to see whether more changes to rejuvenate the trade might be possible.
If it works, I think it might be extended to urban cabs and might even convince operators to consider other changes to boost trade.
For many years, there have been calls to dismantle the physical barrier between New Territories and urban taxis, allowing both to operate freely throughout Hong Kong. The idea is to consolidate the 5,000-plus green cabs with some 15,000 red cabs in order to provide a bigger and more convenient service to the public. Unfortunately, whenever this concept has been brought up over the past few years it has been shot down by our New Territories counterparts because they see it more as a hostile takeover rather than a beneficial merger. They believed we were trying to swallow them up and invade their territory.
I think it is now time for the industry to rethink its future direction and look at ways to restructure the business as a whole and not to limit its development by the red and green division. This practice is not only out of date, it is also extremely territorial and short-sighted.
The taxi trade is not like it was 10 years ago. In those golden years, taxis had a big advantage over other public transport because we had air-conditioning and provided a 24-hour service to the public. Now, the public transport infrastructure has been greatly improved, providing a similar round-the-clock service at cheaper rates.
Although we still provide a more convenient service, we have to be realistic that this is still a luxury option and we need to find some innovative ways to make us stand out from the crowd.
A few years ago I could easily make $800 in four hours between 10pm and 2am, and anything I made after that would be an extra bonus. But now, for a full shift of 12 hours, I would be extremely lucky to hit that target. We have to be realistic - even fare reductions will not be able to boost business in a short time. Cheaper fares only allow a limited growth in passenger numbers. But at least it could start getting people into the habit of taking taxis again. And I hope that habit will develop into second nature, like it was in the good old days when demand was far greater than supply.