Malaysia-Taxi-02

Last week, it was reported that taxi drivers were apparently returning their vehicles to their respective companies in huge numbers, with the number bandied being as high as 10,000. Now, those involved in the taxi business say there is a possibility the RM230 million industry may collapse in the next 16 months, buckling in the wake of pressure from ride-hailing services such as Grab and Uber.

According to industry insiders, taxi firms are expecting losses in revenue of up to RM60 million loss by year end if the Land Public Transport Commission (SPAD) doesn’t step in to save it, The Sun reports.

A taxi operator said the industry is experiencing rapid decline, with an increasing number of new taxis sitting dormant and existing taxis being returned by cabbies unwilling to continue driving. Avenue Drive managing director Abd Razak Abd Aziz said that on average, the industry has been suffering between RM15 million and RM20 million losses every month.

“The business was bad post-GST. With Uber and Grab in the picture, we are suffering even more. Take for example, a new Proton Persona taxi with a cost of RM50,000 each. Imagine, if one operator cannot lease out 50 Persona taxis or have them returned (by the drivers); RM2.5 million lost is just for one small company,” he told the publication.

uber-grab

“Think about the big taxi operators and the whole industry, as there will be some 20,000 abandoned taxis in the coming months. Think about loss of income by taxi drivers and also taxi operators having to service bank loans and other costs,” he said, adding that in the case of his company, around 20 taxis had been returned by cabbies since July and there had been no takers for 60 new taxis since early this year.

Another taxi operator said that the playing field was not lever between taxis and ride-hailing services. “Please ask SPAD what it is doing by allowing Uber and Grab to operate illegally, without Puspakom inspection and other things,” said a spokesman for Uptownace.

Meanwhile, an industry professional reckons that many taxi operators won’t survive beyond 2018 if ride-hailing services continue to offer lower fares. “Cheaper fare is the primary reason why many passengers are ditching taxis and switching to Grab or Uber. It is already affecting cabbies and taxi operators badly,” said Malaysian Association of Tour and Travel Agents (MATTA) liaison manager Y.S. Chan.

The Sun said that checks it had conducted at several taxi company depots in Rawang, Selayang, Kepong, Ampang, Pandan, Seri Kembangan and Shah Alam had revealed that around 1,600 taxis were parked within these premises.