GRANTING OF LICENCES TO INDIVIDUALS TO OPERATE TAXIS (Government's policy)

Mr Jeyaretnam asked the Minister for Communications if he will outline the rationale for the Government's policy of not granting licences to individuals to operate taxis.

Dr John Chen Seow Phun (for the Minister for Communications): Sir, prior to 1975, taxi licences were issued to individuals to operate taxis. However, this arrangement was unsatisfactory. Taxis were poorly maintained. There were malpractices and abuses. And some owners of taxi licences were not driving but hiring out their taxis to others and simply collecting rental. Worse, syndicates emerged to control and exploit taxi drivers. The result was unreliable and unsafe taxi services. Commuters suffered.

To upgrade taxi services, we have since 1975 issued new taxi licences only to bona fide taxi companies or organisations which have the resources and expertise to manage the pool of drivers and fleet of taxis. As a result of this policy, today the three taxi companies, namely, Comfort, CityCab and TIBS, operate a combined fleet of 15,900 taxis. Commuters enjoy a wide range of services, including Premiere Taxi Service, Mercedes Cabs, London Cabs, Airport Direct and even Cab-Pooling services.

Under the new policy, anyone can obtain a taxi driver vocational licence from LTA and rent a taxi from one of the taxi companies. Nobody, I repeat, nobody has been stopped from earning a living as a taxi driver.

Mr Jeyaretnam: As I understand the Minister, there are two reasons underlying the Ministry's decision. One is that those to whom licences were issued, individuals, ie, to operate taxis, hire them out.

Mr Speaker: Mr Jeyaretnam, can you proceed with your question? It is not necessary to repeat the answer.

Mr Jeyaretnam: Is that not what the companies are doing? They are hiring the taxis to the drivers. Yes. Are the drivers not paying a hiring charge to the companies? So what is the difference? The second is, the Minister says the Ministry found out a syndicate was controlling and exploiting the drivers. Would you rather have the companies exploit the drivers? May I ask: is one of the reasons for not granting licences to individuals to try and stop taxi drivers from expressing their opinion about the Government because I have been told more than once that one of the NTUC rules is that they should stop criticising the Government?

Dr John Chen Seow Phun: Mr Speaker, Sir, the first question is about comparison between the syndicates and the public listed companies. There is no comparison. How can you compare them? The syndicates were out there to make profit and they did not care about the welfare of the drivers and the services that the commuters would get. It is precisely because of the experience that we have seen in the past that we have done away with individual licence as it will result in malpractices. But the companies are different. The companies today provide investments. For instance, they have spent a lot of money on the satellite system to enable radio booking and the taxi drivers actually receive the booking fee. Let me just give the Member an illustration of how taxi-drivers are being looked after by the companies. I take Comfort as an example. Today, Comfort has about 18,000 drivers, including relief drivers, and the average income of these drivers is about $1,800 per month. That means $32 million per month, and over a year it is $380 million. Do you know how much the company earns for its shareholders? $20 million over a year. That is about 7% of what the taxi-drivers are getting, not to mention all the services that they put in place to benefit the commuters and also the drivers, so that they can earn an easier living. Can a syndicate do such things? Obviously, it is out of the question.

On his second question about taxi-drivers, they are responsible citizens. Of course, we have heard some of them, from personal experience, commenting on Government policies, but this is part and parcel of their right.

Mr Seng Han Thong (Ang Mo Kio GRC): Sir, is there any plan by the Ministry to have more frequent dialogue sessions with the taxi-drivers so that they could air their views and criticise the policies of LTA?

Dr John Chen Seow Phun: Indeed, Sir. The Ministry supports the formation of the Taxi Operators Association and after its formation, we have had a number of dialogue sessions with them. We listen to their views and we continuously do our utmost to improve their working conditions and the services to commuters.

Mr Seng Han Thong: Was there any dialogue session between the Ministry and the taxi-drivers association on the ERP?

Dr John Chen Seow Phun: Yes. In fact, not just on ERP but on many issues that are of interest and relevance to the taxi-drivers.

Mr Low Thia Khiang: I just heard that the taxi-drivers' average income is $1,800. I do not know whether the figure quoted is correct because I remember, some years ago, when the taxi diesel tax was raised, the then Minister for Communications, Dr Yeo Ning Hong, said that taxi-drivers earned as much as $3,000. Would the Minister of State like to clarify?

Dr John Chen Seow Phun: If you take the main hirer, the income is higher. But if you take the relief driver, the income is lower. But the average is about $1,800.

Mr Low Thia Khiang: Since the Minister of State says that LTA now issues licence to bona fide taxi operators and the main complaint was that taxi-drivers did not take their licence very seriously, would the Ministry consider issuing taxi licence to bona fide taxi-drivers?

Dr John Chen Seow Phun: When I say "bona fide organisations and companies", it means that we assess the level of their quality of service and their ability to provide these services before we issue a licence to these companies. If we issue licences to individuals, as I mentioned, you open up all these possible abuses. We have done that in the past and I am telling the Member that if we do that, we are going back to those old days, and that is not acceptable.

Mr Jeyaretnam: Does the Ministry accept that a taxi-driver who is allowed to own his own taxi and to use it as he likes is running a road business of his own? He owns the taxi at the end. So what is wrong with that? Why is the Government so keen to kill all individual businesses that everyone should go into a company? Secondly, about these sessions that I have heard, are taxi-drivers allowed to attend public meetings and voice their grievances not only about their conditions but about the conditions that exist in Singapore for everyone?

Dr John Chen Seow Phun: Mr Speaker, Sir, I think Mr Jeyaretnam is repeating the question about why we would not allow individual taxi-drivers to own their licence and operate their business. As I said, if you were to compare the scenario that he proposed with what is present today, there is no comparison because we have seen that once you allow individuals to do that, there would be people who say, "You cannot afford the taxi, right? Because you need to pay upfront all the costs, I will finance you". Or, in fact, anybody could say, "Look, I will become the boss and take the taxi licence, and I will rent it to the taxi-drivers." The whole problem will re-emerge. Now, it is different, as we make sure that only the bona fide companies with a track record or with ability to run a good taxi service will be given the taxi licence. That is the difference. On his second question, the taxi company would have to manage its pool of taxi-drivers according to the company's policy. I cannot comment on that.

Mr Chiam See Tong (Potong Pasir): Sir, what sort of welfare does the taxi companies provide for their drivers?

Dr John Chen Seow Phun: I believe they provide training, recreational facilities and opportunities to earn a better living. For example, Comfort spent $30 million for a satellite system to enable phone booking. They actually give the booking fee to the taxi-drivers. In other words, if you call a Comfort taxi-driver, and you have to pay a booking fee, Comfort lets the taxi-driver keep a large part of the booking fee to encourage him to take phone booking. Companies can give these benefits but syndicates cannot .

Mr Seng Han Tong: In what way has the Ministry helped the taxi-drivers in topping up their Medisave account?

Mr Speaker: Order. I think we are straying away from the main question. Mr Chiam, do you have any relevant supplementary questions?

Mr Chiam See Tong: The Minister of State has said that the average earning of taxi-drivers is $1,800. How many hours does a taxi-driver need to work to earn this amount?

Dr John Chen Seow Phun: During good times, they work less hours and may even be able to earn more. But during an economic downturn, we hear that taxi-drivers are now driving longer hours. From the latest information, the earning is about $1,800. For a single shift, they can work 8-10 hours. It is up to them. They are either hirers or owner operators and if they decide to work longer hours, they will earn more money.

Mr Speaker: Order, order. I think we are straying away further and further from the question.

Mr Jeyaretnam: I have one last question, Sir.

Mr Speaker: All right. I will listen to your question first.

Mr Jeyaretnam: What evidence did the Ministry have about syndicates exploiting taxi-drivers, and if they do have that, would they make it public so that we can see it?

Dr John Chen Seow Phun: Mr Speaker, Sir, as I said, this happened in the 1960s and early 1970s. I do not know whether Mr Jeyaretnam remembers that in 1982 he asked the same question, and he is repeating the same question today. At that time we have already told him. At that time, probably his memory was better and he could remember there was this problem of syndicates exploiting taxi-drivers.