TAXI DRIVERS (Earnings)

Column: 919

TAXI DRIVERS:

(Earnings): 12.

Mdm Cynthia Phua asked the Minister for Transport what is the situation given that more taxi drivers are unable to earn enough to pay for their monthly rentals.

The Minister for Transport (Mr Yeo Cheow Tong): Mr Speaker, Sir, the taxi companies have confirmed with MOT that some of them have experienced a slight increase in the number of taxi drivers defaulting on the payment of rentals. However, the overall default rates are still fairly low, ie, less than 1% per month. I was also given similar feedback in my recent dialogue session with representatives of the taxi associations. They informed me that they now need to work harder to maintain their previous income levels.

Sir, the data from the taxi companies has also showed that the average gross monthly income of taxi drivers has actually improved from $5,440 in 2002 to $5,780 this year for a single shift operation. For a two-shift operation, it has increased from $7,290 to $7,940. However, the average net monthly earnings over the same period have declined from $2,230 to $1,880 for a single shift, and from $3,800 to $3,580

Column: 920

for a two-shift operation. This is due largely to the cumulative 48% surge in diesel prices over the past two years. Diesel costs now account for 34% of total operating costs compared to only 25% in 2003.

The taxi rental charge is the other major cost component for a taxi driver. However, we have checked and confirmed that taxi rental rates have remained fairly stable.

Sir, taxi drivers operate as partners of taxi companies. As such, the taxi companies will need to ensure that their rentals and their drivers' income remain competitive. Only then can they recruit enough taxi drivers to ensure that their taxi fleets are well-utilised. In line with this, taxi companies have provided various financial incentives and reliefs to their drivers over the years. For example, Comfort, CityCab and Yellow Top Cab provided a special one-time bonus to their drivers early this year. The special bonus ranged from $240 to $360 per driver, according to the number of years of service. SMRT Taxis had also recently given its drivers a $380 diesel relief bonus to offset the high cost of diesel.

However, such help has only gone a small way to offset the huge increase in fuel costs. As taxi fares have remained largely unchanged for the past five years, in effect, the taxi drivers have had to absorb this large increase in fuel costs, instead of passing it on to the passengers. Three of the taxi companies have recently increased the telephone booking fee for peak hour bookings, but have left the taxi fares unchanged. This will help to increase the incomes of their drivers. But I am not sure if this will be enough to offset the increase in fuel costs. However, as the taxi industry is now fully deregulated, it is up to the companies to decide on what is the appropriate taxi fare level that will allow their drivers to earn a

Column: 921

reasonable and competitive income and at the same time, attract enough customers.