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Sense and nonsense

It's one of many oddities about the world's freest economy that taxi drivers here would be breaking the law if they offered discounts to passengers.  However, if passengers ask for a discount, taxi drivers can agree - and of course everyone knows who to call to ask for a discount.  Other taxi drivers are not happy about this, though. 

Here's a brilliant solution to this 'problem' (Cabbies do U-turn on long-trip discounts- subscription required):

A taxi drivers' group has dropped its support for discounts on longer journeys - a move intended to help the trade combat illicit discounters - after government advisers said requesting a discount would not be made illegal.

Instead of charging slightly more for short journeys but a reduced rate for longer trips, as the Transport Advisory Committee (TAC) proposes, the Urban Taxi Drivers' Association Joint Committee wants the flagfall - covering the first 2km - to go up by one-quarter to HK$20, and the charge for each 200 metres after that go up from HK$1.40 to HK$2, regardless of journey length.

So they want a big increase in fares so that they can then offer a discount?  Yes, that seems to be their brilliant plan:

Mr Kwok said: "As the TAC said there would be no law against discounts, we think it is better to set the fare higher so there will be more room for negotiation with passengers."

That's right.  They think they can increase fares by 40% and offer a 40% discount. Idiots. 

Yesterday's SCMP had more on the background to this story (Taxi operators unhappy with fares overhaul - subscription required):

Taxi Operators' Association chairman Leung Shiu-cheong said 15 per cent of the city's 30,000 drivers offered discounts of 20 to 40 per cent for longer journeys. Without a law against bargaining, the discounters would just be able to undercut the new fares, he said.

But [TAC chairwoman Teresa] Cheng said legislation was not workable.

"If a mere verbal inquiry could attract a criminal penalty, this would deter the public, including tourists, from using taxi services. No other cities in the world penalise passengers for this," she said.

Shirley Lam, who uses taxis once or twice a month, said the new fare structure was more reasonable but she would still use discount gangs.

Discount gangs?  Good grief - isn't this just the free market in operation?

Yesterday's Standard had the story of what is really likely to happen (Taxi fares in for another shake-up):

Taxi fares may undergo a major revamp as early as next year if the government goes through with recommendations proposed by the Transport Advisory Committee.

In its report on the Review of Taxi Operations released yesterday, TAC suggested taxis be allowed to charge more for short trips but less than current rates for long-haul rides.

TAC chairwoman Teresa Cheng Yeuk-wah said this would help restore a level playing field for taxi operators whose businesses have been seriously affected by illicit discount cabbies.

Cheng said the changes would also "align the taxi fare structure with those of railways, franchised buses and green mini-buses."

Of course there is always competition between different forms of public transport and taxis, but I can't see how it makes any sense to even attempt to align the fare structure.  What does it mean?

The proposal on taxi fares is to increase the flagfall (first 2km) to HK$18 and then reduce the charge per kilometer after 8km.  This would have the effect of increasing the charge for shorter journeys but making longer journeys cheaper.  Well, yes, but not much cheaper - by my calculation, a fare of HK$149 would come down to HK$141, which certainly won't be enough to compete with the 'discount gangs'.  Plus there seems to be no rush to introduce these changes:

Drivers are anxious for a new structure so they can offer lower fares for longer trips to compete with illicit discounters, but they say it will now be the end of the year at least before changes can be introduced.

The committee said yesterday the structure should be changed from the present "front-loaded with subsequent incremental charges being calculated at the same rate" to "front-loaded with a varying descending scale for incremental charges".

Eh?

Comments

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WhiteDuskRed

Its all nonsense. End of the day its all about increasing the fares of short trips, right? Why can't they just reduce prices for the longer journey trips and keep the present flagfall? Considering the worsening oil prices, we will end up with taxi-drivers refusing rides because they need to travel too far for less.

The Urban Taxi Drivers' Association wants the fare increase so that they can earn as much as possible from all those tourists who don't know how to negotiate! And does that mean I must negotiate like a market lady everytime I take a cab? Why can't they just keep the fare structure as it is and allow everyone their own say in price negotiation?

"front-loaded with a varying descending scale for incremental charges" - If this gets implemented then they might be able to compete with the discount gangs. First 2000m at HKD1.40/200m then next 3000m at HKD1.40/300m and so on.

Anyway I'm not too worried about all these implementations. They say it will be the end of the year before the changes will take place. In my opinion thats overly optimistic~

fumier

"They think they can increase fares by 40% and offer a 40% discount. Idiots."

If they put their price up by 40% (say from $100 to $140) and then discounted by 40% (by $140 x 40%) to HK$84 they would be worse off. They would indeed be idiots.

Chris

So it's not just my grammar that's rubbish, my maths is also no good.

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