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On the Grab – Uber merger

A couple of weeks ago, I received a message from Uber confirming what was in the news for some time then, and what was rumoured a longer while back. Uber Philippines was closing shop after merging with main competitor Grab, while the mother company also acquiring a stake in Grab. Later, I also received a message from Grab (I use either depending on availability and cost.) welcoming Uber users to Grab.

The result so far has been frustrating if not disappointing to many who have relied on Uber for commuting and the typical trips that you usually associate with taking a taxi.

Recent news revealed that Grab is using an even more punitive pricing scheme compared to Uber’s surge pricing. While the LTFRB moved to scrap this, Grab has been apprehensive, stating that this was an incentive for their drivers. There is actually another side to the concept of surge pricing that LTFRB does not or seems to refuse to understand. That is, that dynamic and more expensive fares related to congestion (or road conditions) is something that’s actually related to the concept of congestion pricing. This actually penalises the use of vehicles like private cars or taxis in favour of higher capacity transport like buses or, if available, trains.

Even more recent is the news that Grab is suspending about 500 of its drivers for excessive cancellation and/or rejection of trips. Unlike Uber before, Grab drivers have the “luxury” of knowing where a potential passenger is heading. That gives the driver the option to accept or reject a proposed fare. Uber drivers didn’t know where the potential passenger was heading and to my knowledge, was stricter with penalising their drivers. The only caveat I know is that passengers can also be penalised if the driver requests for a cancellation and the passenger obliges out of good faith (e.g., An Uber driver in Cebu requested me to cancel the request as he claimed he was caught in traffic and would be penalised if he canceled. I ended up protesting Uber penalising me 100 pesos for my cancellation. Uber did not act on it in my favour.).

The issues surrounding the Grab/Uber merger though should not be there in the first place if we had good taxi services. When I say good I am referring to the quality of service provided by taxis in Singapore and Japan. Of course, they also have good public transportation there so there’s also a case for what most people will likely be taking instead of cars and taxis (which operate similarly as cars). One wonders how and why LTFRB seems to be so strict vs TNCs while being lax with taxis. Meanwhile, DOTr is scrambling on the desperate catch-up work it has to do about mass transit lines and public transport rationalisation. Good luck to us commuters!

On the negative social impacts of ridesharing/ridesourcing

I have shared a few articles before about the impacts of ridesharing/ridesourcing to taxi drivers. In the Philippines, taxis where ridesharing/ridesourcing services are available are plenty are supposed to have experienced a significant drop in their business. Yet, there has been little improvement in taxi services in Metro Manila. The Department of Transportation (DOTr) and the Land Transportation Franchising and Regulatory Board (LTFRB) have not put pressure on taxis to improve so operators and drivers are pretty much the same in terms of practices and service quality. Here is a recent article that appeared on Wired about New York taxi drivers:

Katz, M. (2018) “Why are New York taxi drivers killing themselves?”, wired.com, https://www.wired.com/story/why-are-new-york-taxi-drivers-committing-suicide/?CNDID=37243643&mbid=nl_032918_daily_list1_p4 (Last accessed 3/30/2018).

Admittedly, the set-up for New York taxis is quite different from those in the Philippines. The medallions referred to in the article are limited and carries with it prestige and perhaps honour, considering the commitment and pride attached to them. Franchises in the Philippines are quite different and drivers will usually work for multiple operators/employers. Those who own their taxis are not so many and can be flexible in the way they conduct their business. Perhaps a significant number of drivers have even left the taxi business and now drive for TNCs like Grab and Uber.

With Uber’s sale of their business in Southeast Asia to main rival Grab, it seems now that there is suddenly and practically a monopoly of the ridesharing/ridesourcing business. Upstarts have not had a significant share of the market and by all indications will not get a bigger share in the near future. I still think that there should be pressure for taxi services to be improved and a good chance for people to shift back to taxis. But this requires effort on both sides (regulator and operator). I still mention examples of taxi operators in Cebu and Iloilo who appear to be unscathed by the entry of ridesharing/ridesourcing in those cities. Good quality taxi services will promote itself and will be patronised by commuters.

Origins of ridesharing/ride-hailing?

Here is a very interesting article on the beginning of Uber:

Campbell, G. (2017) The Beginning of Uber,” Medium, August 23, 2017, https://medium.com/@gc/the-beginning-of-uber-7fb17e544851 (Last accessed 11/10/2017).

The article contains the company’s first pitch and should be of interest to researchers (that includes my students) who may want to know about and from the Uber’s origins. It might be useful to taxi operators and drivers as well since the slides show their characterization and what (good) features distinguished Uber from the conventional taxis at the time.

Melbourne taxi rides

I took taxis between the airport and the serviced apartment where I stayed at in Melbourne. Both rides were uneventful ones and I enjoyed the good service provided. Uber is also available but Melbourne taxis appear to be providing an obviously higher quality of service compared to what you can get in Metro Manila.

The following photo shows a couple of stickers that inform the passenger(s) about standard fares and the applicable tolls should the taxis use tollways and therefore incur additional costs.

One can pay cash or opt to use a debit or credit card to pay for taxi fares. And you can get a receipt that you can use to account for your transport expenses. That is, the receipt is useful for reimbursements.

For both my rides, I didn’t encounter any unruly taxi drivers. One was a bit chatty but I enjoyed the conversations about life in general. I learned that he was originally from Somalia and had a son studying in university. He said he was very happy with his life in Australia and was thankful of his job that enabled him to support his family including being able to afford to send his children to schools. I guess he is one of the lucky immigrants there and his hard work paid off in this country where the environment generally rewards hardworking people with much opportunities to improve their lot.

Taxi operators and drivers in Metro Manila should learn about what good service is all about from taxis abroad. Perhaps they can pick up a good thing or two for how they can improve services and thereby reducing if nor eliminating  the bad impressions people generally have about them that have led to ridesharing services to become quite popular. A significant improvement in taxi services can be rewarding in terms of ridership or patronage.

Some thoughts on the ridesharing vs taxi issues in Metro Manila

A lot have been said and written about the issues concerning ridesharing and taxis in Metro Manila. There are the personal posts you read and are being shared around social media. There are the obviously sponsored posts and articles going around. These are usually by trolls but may also include some personalities who are more than willing to lend their names to a cause they think is worth taking on. Unfortunately, the supposed victim here is also an oppressor if one tries to delve into their operations and practices. The real victims here, aside from the commuters who patronize ridesharing, are drivers and operators.

I stated Metro Manila because there seems to be no serious issues on ridesharing or taxis in other Philippine cities. Why is that? Is it because taxis provide better services in other cities like say, Cebu, Davao or Iloilo? Is it because public transport in other cities are better compared to Metro Manila? Or is it because ridesharing companies cannot compete with local, taxi-like transport like tricycles? Let me put it like this: Metro Manila public transport has deteriorated in the past decades. This deterioration comes in many forms including the very slow development of mass transit systems and the continued dominance of road-based modes.

Private vehicle mode shares have increased significantly over the last four decades. In the 1970s, the estimated split between public and private transport was about 75/25. In the 1980s, it was close to 70/30 but with public transport enjoying just about 70% shares. In the 1990s, the 70% had already been breached with public transport share estimated to be about 68%. The 2000s saw public transport shares to have been eroded further, with closer to 65% of trips using public transport. The last decade likely saw the further rise of private transport shares with the rapid increase in motorcycle ownership and use and the emergence of ridesharing such as Uber and Grab. This, despite the increase in population for the metropolis and also the increase in road public transport vehicles particularly UV Express.

These road-based modes are generally low capacity and require so many vehicles to transport so many people. And yet people choose them (e.g., purchase and ride a motorcycle, patronize Uber or Grab, etc.) because their options for their commutes are generally worse off. Motorcycles are not for everyone and not everyone can afford to or want to own a car. And yet, there seems to be a sizable population wanting (not necessarily needing) to be driven to and from their homes, workplaces, schools or other places of interest but not via conventional taxis; as evidenced from the popularity of ridesharing services.

Perhaps the only way to resolve the issue lies not only in the drastic improvement of conventional taxi services. Operators and drivers have had a lot of chances to do this but there seems to be little positive change here. Maybe, and ultimately, the solution is in the expedited development of mass transit systems like rail transit lines and bus rapid transit (BRT). And so the initiatives of the current administration along such infrastructure projects are most welcome and may stave off the decline of public transport mode shares (revival?). Better public transport should help make commutes more bearable. Commutes should be safer, faster and relatively inexpensive compared to owning and operating a car. And may I add that using conventional public transport should be more attractive than ridesharing.

On the Uber and Grab predicament

A lot has been said and written for or against Uber and Grab. Social media made sure the more popular but not necessarily the truthful ones are spread. One popular personality associated with motoring has even led an online petition against the rulings by the Land Transportation Franchising and Regulatory Board (LTFRB). An objective check of the facts reveal that LTFRB is not solely at fault here. Uber and Grab should not have promoted themselves and took in additional drivers (nagpaasa ng mga drivers) after the agency issued a moratorium last year. Estimates vary but it seems they have taken in tens of thousands of drivers (20.000? 30,000? 40,000?) and earned revenues along the way to what is now an historic penalty levied upon Uber and Grab by the LTFRB.

Perhaps the most level-headed article I’ve seen online is the following:

The thing about Grab, Uber and the LTFRB [by Vince Pornelos, July 18, 2017, https://www.autoindustriya.com/editors-note/the-thing-about-grab-uber-and-the-ltfrb.html]

It seems all is well, for now, as meetings were held between the DOTr, LTFRB and the concerned parties (Uber and Grab). In one of the meetings, a couple of Senators seem to have brokered a deal to resolve what appeared to be an impasse that a lot of people on social media reacted to. There are definitely a lot of vested (and veiled) interests involved here including those by various “operators” in the transport sector on both the sides of government and private sector. One takeaway though that I observed is that many appear to be against LTFRB even though the agency was truthful about their statements regarding the illegally operating transport vehicles. They seem to have made up their minds about the LTFRB and this is not surprising as transport problems have been festering for decades with little progress in terms of improving transport, conventional or innovative. Most people seem to have lost their patience about transport services and regulation, and perhaps this is a good thing if it translated to demanding for mass transit, too.

Grab at NAIA Terminal 2

Here is another useful post for travelers especially during this Holy Week and the summer holiday season in the Philippines. Many people usually look for a ride heading out from the airport. Not everyone would have someone to fetch them. There are several options now for those wanting to take public transport. Aside from the conventional taxis, there are also airport taxis, vans and the more recent airport bus service provided by UBE Express. Ridesharing or car sharing services are also available and the most visible will be Grab with options for either car or taxi available via you own app or through their booths located at the NAIA airport terminals. There should be a Grab booth located at the arrival areas of NAIA’s terminals. They also have a booth at the Mactan Cebu International Airport terminal.

You can easily spot the Grab booth and pick-up area as you exit the terminal’s arrival lounge.

You can book a ride with the grab staff at the booth if you don’t have a smart phone and the Grab app. You can also just call for a car or taxi using the app. This is the pick-up point for Grab Cars. Grab Taxis would have to use the driveways for taxis parallel and just to the left of this driveway.

Grab has become a game changer for taxis out of the airport. In fact, my own father found them to be a convenient and safe option for a recent trip from Terminal 2 to our home in Cainta. He didn’t have to negotiate fares and he paid a very reasonable fare while enjoying his ride on a recent model car.