Ban on taxi fare discounts should be last resort

A proposal to ban taxi passengers from asking for fare discounts deserves consideration. But the government should not make any rash change to the system before thinking through the wider implications.

Moves to change the law to stop the practice are prompted by anecdotal evidence of widespread discounting. Some drivers have reportedly been assaulted by passengers for refusing to accept less than the fare shown on the meter. Drivers should, however, think deeply about the matter as maintaining the status quo may be in their best interests.

The law stipulates that taxis charge no more than the metered fare. Drivers are not permitted to bargain with passengers. But the law does not make it an offence for passengers to ask for discounts or for drivers to agree to such requests. At first glance, that looks like a glaring loophole. What is overlooked by critics of the existing system is that the law is firmly behind the drivers, who can say yes or no when asked for a lower fare.

The law makes its possible for the two parties to come to a mutually satisfactory agreement in this way. Many have taken advantage of this flexibility - late-night workers who want to be taken home by a dependable cab, for example, or parents who want their children driven to and from schools by somebody they know and can trace. In such cases, a suitable discount to regular customers works to the benefit of both parties. Drivers who refuse to accept discounts claim they are being undercut by those who are prepared to charge less. It is difficult to verify their claim that up to 90 per cent of the city's 40,000 drivers give discounts, commonly of at least 20 per cent. But if rampant discounting is a real problem, the solution should lie in lowering the metered fare.

That, however, would not be a step taxi owners and financiers would want to contemplate. Taxi licences are a tradeable commodity whose value is underpinned by government policies on fares and the number of licences issued. A collapse in the price of taxi licences due to lower meter fares would be socially and politically problematic. Nor would it be desirable on environmental grounds. As a personalised form of transport, taxis are as inefficient as private cars. They clog roads and contribute to higher emissions. If fares had to be adjusted, they should go up, not down, to encourage people to use other forms of public transport.

Complaints about taxi drivers being assaulted for refusing to give discounts to passengers should be taken seriously. But the proper response would be for the police to step up action against violent passengers. Drivers should realise that they are hurting themselves if they succumb to requests for discounts too easily.