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Taxi Update: If we’re better than New York, why is the taxi system killing us?

TRANSIT took note of a series of articles about the taxi industry. We thought to place the policy issues first, but then we saw this article, which made us feel terrible and showcased the terrible state of the taxi industry.

Cabbie commits suicide due to debt woes (The Star)
Wednesday June 22, 2011

A TAXI driver who failed to settle his RM12,500 debt took his own life after loan sharks snatched his taxi.

Major Chinese dailies reported that the 51-year-old taxi driver gave a friend RM300 to pass to his mother before he hanged himself at the Taxi Drivers Club at a village in Johor Baru early on Monday.

Wen De Fa left a suicide note saying that he had borrowed RM9,000 from the loan sharks but was asked to repay twice the amount.

He said he was assaulted and his taxi was taken away by the loan sharks, who forced him to sign a form to transfer the ownership of the vehicle.

He also revealed the identities of the loan sharks, also taxi drivers.

“Please arrest them, they are loan sharks,” he wrote at the end of the suicide note.

Wen also sent a text message to his sister, requesting her to take care of their mother and his teenage daughter.


The policy and the numbers often get our attention, but we forget that this is a human-powered industry with people (drivers and passengers) who are being hurt by the industry.

The next article showcases the issue of too many taxi permits and the lack of solutions to this matter.

We beat New York! (Malay Mail)
More cabs in Klang Valley than in the Big Apple, says SPAD
Wednesday, June 22nd, 2011

KUALA LUMPUR: Are there too many taxis in the Klang Valley? Pose this question to any public transport-user who has experienced spending hours attempting to flag down a cab on a rainy Sunday night, and there’s a good chance you’ll be met with a disbelieving look.

Yet, the figures don’t lie. The Klang Valley has more taxis on its streets than even one of the world’s busiest capitals, New York City.

As of March, the Klang Valley is currently home to 37,000 budget as well as executive taxis. This puts New York City’s 13,237 world-famous yellow cabs well in the shade.

Figures compiled by the Land Public Transport Commission (SPAD), the independent regulator for public transport, reveal that the Klang Valley’s taxi-to-passenger ratio also tops that of other bustling capital cities such as London, Sydney, Hong Kong and even Jakarta.

However the commission tasked with overseeing the country’s public transport demands, faces a monumental challenge on its hands, not just due to logistics problems but that of greed.

Since assuming the reins this year, SPAD has had to fend off numerous approaches for even more taxi permits.

The requests, said SPAD chairman Tan Sri Syed Hamid Albar, come from all quarters, including politicians.

He described the situation as nothing short of a “dilemma”.

“Despite the already high numbers, we are still receiving requests to approve new taxi permits from various groups.

“These include associations, retirees and even politicians,” he told The Malay Mail.

Industry analysts have been quick to point out that the massive number of taxis in the Klang Valley has been a major contributor towards the deterioration of taxi services.

They noted that the burgeoning number of cabs have added to unhealthy practices such as complacency and lack of commitment among taxi companies to provide better service.

Syed Hamid, meanwhile, said the commission was aware of the grouses and problems.

“We are aware of the public outcry with the current taxi service in the Klang Valley. The commission wants to make it a win-win situation for the public as well as taxi operators. We want to uphold professionalism within the industry via the National Public Transport Policy Framework and the Greater Kuala Lumpur – Klang Valley Public Transport Masterplan that will be unveiled in September.”

Syed Hamid said improving taxi service should be based on the laws of supply and demand.

“We hope to address the issue of oversupply of permits gradually in the coming years through the PTMP. The master plan includes training for taxi drivers and ensuring a high level of service efficiency, as part of the terms and conditions.

“We expect the taxi operators to fully operate with us on these matters.”

When asked if the commission would reduce the number of taxis in the Klang Valley, he said: “What had been given, we cannot withdraw. But this does not mean we won’t come down hard on indisciplined and problematic taxi drivers. We won’t hesitate to revoke their permits and licences.”

Big number but poor service

AN industry analyst, who wished to remain anonymous, pointed out that based on research, the high number of taxis in Klang Valley have contributed greatly to the deterioration of service, increased level of unhealthy practice which includes the complacency and level of commitment to run a taxi service.

“By looking at the taxis outnumbering those in other cities which include New York and Hong Kong, we wonder why our taxi service is not even close to the standard of the New York City icon – the yellow cabs,” he said.

“Over there, it is easy to hail a cab as they always move around the city and rarely stay put in one place.”

However, he said, the impression of taxi service in Kuala Lumpur was a different story altogether.

Commonplace among the grouses are difficulty in getting taxis in the city, hailing them by the roadside, the deplorable service quality and cabbies’ refusal to serve certain areas including central KL as well as refusing to use the meter by imposing flat rates.

“It is difficult to board or even hail a taxi during peak hours and we also often hear complaints of taxis overcharging and snubbing passengers.

“There’s no denying the fact that oversupply of taxis has led to the attitude problem of haggling and the existence of touts in public transport terminals, shopping malls and other public places,” said the analyst, who is all too familiar with the taxi industry after being in it for the last 25 years.

‘Stop issuing permits’

TAXI associations are pleading with the government to stop giving out new taxi permits in view of the high number of taxis on Klang Valley roads.

Malaysian Taxi, Limousine and Hired Car Drivers and Operators Association (Petekma) president Yusof Lahir, hoped the Land Public Transport Commission (SPAD) would be firm in addressing the issue of taxi permits oversupply.

“I urged SPAD to please stop giving out new permits if we want to reach the level of taxi service in New York, Hong Kong or Singapore. We are already facing an outpour of taxis on the road lately.

“This problem is also contributing to the lackadaisical attitude among the taxi drivers which includes refusing to serve certain routes,” he said.

Yusof said the teething problem of the oversupply of permits stemmed from the system of awarding permits over the years from the previous governing bodies.

“It was an open secret that previous authorities served the socio-economic objectives which were apparently abused by influential politicians which led to the present state of affairs of so many ‘unnecessary’ permits. I had voiced this previously to various ministers. Now we can see the effect of so many taxis around,” he said.

On taxi touts in public transport terminals and at KL International Airport, Yusof said the high number of taxis and lax enforcement contributed to the matter.

“The government should look into enforcement very seriously. I won’t deny the fact that attitude problems by some drivers have smeared the industry, but enforcement should keep this in check.”

Koperasi Pengangkutan Putrajaya dan Cyberjaya Berhad secretary Mohd Salleh Mat Zain, said he was surprised to learn the number of taxis have increased dramatically since last year.

“In 2010, the number of taxis stood at 27,000 and it was tough for us to ‘cari makan’. Today, there are 10,000 more so you can imagine the competition. The over surge of taxis has also contributed to the forming of cliques where some of them have monopolised some suburban areas,” he said.

He also concurred with the call for the government to regulate the industry and take stringent measures to raise the level of professionalism among the taxi drivers.

“The taxi industry is staring at a bubble with torrent of taxi permits over the years.

“We have seen how taxi drivers refuse to use meters, haggling passengers and prefer to ply specific routes instead of going out to seek customers in the city.”


If you thought that was bad, check out the next article:

Cabbies express outrage over permit approval (23 June 2011)

Thursday, June 23rd, 2011

KUALA LUMPUR: Taxi drivers in the Klang Valley are upset over the increased issuance of taxi permits by the authorities.

The Malay Mail had in our front page report yesterday highlighted that there are more cab drivers in Klang Valley beating New York city through figures compiled by the Land Public Transport Commission (SPAD).

According to SPAD there are over 37,000 budget and executive taxis in the Klang Valley compared with 13,233 yellow cabs in New York.

Taxi driver, Azmi Latiff, 54, a former government servant, said he was puzzled as to how foreigners were able to get taxi permits.

“It took me three times to obtain my permit, but some foreigners get it so easily. These foreigners cheat and most don’t use meters,” Azmi said, adding it was an offence for a taxi driver to refuse a customer after stopping to ask where he or she wants to go.

Azmi said the passenger could to take action by taking down the plate number and report to the authorities.

He said there were cabbies who avoid picking up passengers during peak hours due to traffic congestion and prefer to have tea at mamak stalls instead.

Another taxi driver, K. Gunasegaran, 43, a cabbie for 17 years said business had been good for him, but he saw a decline in business 10 years ago.

“I have to work for more than 12 hours to take home RM120-RM150 a day and I carry an average of 20 to 25 passengers a day to support my family.”

He said he was also finding it difficult to pay his taxi rent of RM1,200 a month. He has not been able to pay the rent for the past three months.

On the raising number of permits being issued by the authorities, Gunasegaran said: “We lodged many complaints to the Commercial Vehicles Licensing Board for issuing far too many permits but our pleas were turned down.”

Gunasegaran said cab drivers in other countries enjoyed better benefits. “Many are provided with allowances and they get public holidays, whereas in Malaysia, public holidays are when we need to work extra hard.

“In some cases, cab drivers have to fork out their own money to get their cabs repaired without any insurance coverage. To make things worse, most of us don’t have any medical coverage whatsoever.”

Quality matters, say passengers

PUBLIC transport users say the standard of taxi service is poor and cabbies have not shed the image of being fair and honest.

William Kwong, 21, a student at a private institution said despite there being more cabs in the Klang Valley, it was still difficult to get a taxi driver to take you to your destination without first having to haggle on taxi fares.

“I am shocked to learn that our taxi drivers outnumber those in New York. But it is still difficult to get a cab in the Klang Valley. Most of the time you have to call for taxi service and pay extra without them using the meter.”

During one incident, he was asked to pay extra when he tried to get a cab at the Bukit Jalil bus station upon returning from his hometown in Pahang

“My apartment is in the area but the driver told me he will not be using the meter. I would need to pay a flat rate of RM5 as it was a route he doesn’t usually service.”

Bank employee, Vinod Kumar, 24, said passengers were still at the losing end despite the high number of taxis in the Klang Valley. “Nothing has changed in terms of service quality but passengers are more aware of their rights nowadays.”

College student Dennis Tan, 21, said he doesn’t commute much with cabs anymore as he had been cheated numerous times in the past. “There are many cabs in the city but it’s still hard to get an honest cabbie who is not out to fleece you. I just use an alternative mode of transport to be safe than sorry.”


And finally, as expected, Minister in the Prime Minister’s Department Nazri Abd Aziz responds to the article and questions about his role as the taxi permit king – and exhorts SPAD to stop whining and do their job!

Nazri Aziz: ‘I’m no taxi king’ (Malay Mail)
Minister says claims baseless, was not the only one who gave out permits in the past
Thursday, June 23rd, 2011

Following The Malay Mail’s front-page report yesterday on the high number of cabs in the Klang Valley and accusations by industry players on the oversupply of taxi permits, we put Minister in the Prime Minister’s Department Datuk Seri Nazri Aziz in the spotlight regarding the controversy.

Critics have alleged the system is abused by influential politicians which led to the present state of so many “unnecessary” permits allegedly generated during Nazri’s tenure as Entrepreneur Minister. Nazri tells SHAHRIM TAMRIN his side of the story.

NAZRI: ‘If people want to accuse me, please do it with proof or channel it to the Malaysian Anti-Corruption Commission. I don’t mind being investigated’

MM: Why is the taxi service industry in the Klang Valley poor despite the high number of taxis in the area?

NAZRI: I agree that our taxi service is poor for many years despite the high number of them on the road. Why are Klang Valley taxi drivers not like those New York City yellow cabs always cruising on the road? It is sad to note our taxi drivers neglect their responsibility and government’s trust by preferring to run the taxi service at certain hours, specific routes and wanting to make quick bucks.

The authorities should have been strong on enforcement and monitoring to ensure the public get the best service. Right now, the Land Public Transport Commission (SPAD) should focus on how to improve the public transport industry immediately but I won’t be telling SPAD what to do as I am not into micro-managing it.

MM: Is it true you approved disproportionate taxi permits during your tenure as Entrepreneur Minister?

NAZRI: Those who accused me and several other former ministers of the then Enterpreneur and Cooperative Development have no grounds. During my time, taxi permits were given out after looking at so many angles. We carried out surveys and in-depth studies on the requirements for more taxis in Klang Valley.

We even interviewed the public and gathered opinions from various stakeholders. One common finding was that the public wanted more taxis back then. I was not the only one who gave out the permits in the past. Those before and after me also gave out permits based on the need to improve the public transport system.

MM: But some say you have thousands of taxi permits.

NAZRI: First of all, permits given to taxi operators and individuals were not directly supervised by me. There was a committee looking into that. In 2003, there was an allegation that 3,000 permits went to my proxy. This is baseless accusation.

People who accused me, including those from taxi associations, taxi drivers and individuals, have hidden agendas. I know a figure in the taxi circles had applied for 500 permits many years ago and was rejected by the ministry’s tender committee.

The person was not happy and that’s why he came out with berak tahi ayam (baseless) accusations. If people want to accuse me, please do it with proof or channel it to the Malaysian Anti-Corruption Commission (MACC). I don’t mind being investigated.

MM: SPAD recently said they are understaffed and this hampered efforts to weed out taxi touts at KL International Airport. What’s your view on this?

NAZRI: SPAD, as an independent regulator for public transport, should work together with the Road Transport Department and police to empower them to arrest and bring the culprits to court in accordance with SPAD Act 2010. They shouldn’t be coming up with excuses that they are short of manpower. Stop whining and do your job with what you have.

MM: How powerful is SPAD? Is it able to function independently?

NAZRI: SPAD has powers of a commission like the MACC, Election Commission, Energy Commission, Malaysian Communications and Multimedia Commission, and others. SPAD has more powers under the SPAD Act 2010 and it has a wider range of powers compared to the Commercial Vehicles Licensing Board and Department of Railways.

They should just focus on their objective to transform the public transport industry instead of allowing past mistakes (by previous government agencies) to overwhelm them. The public has high expectations of SPAD to turn the industry into a more reliable, integrated, safe and efficient one.

They have to perform as the rakyat is watching. If they don’t, the rakyat and other Members of Parliament won’t be happy. In the end I will be the one who has to answer to them (the MPs) in Parliament.


That’s one week in Malaysia’s taxi industry.

9 replies on “Taxi Update: If we’re better than New York, why is the taxi system killing us?”

I used to take taxis about 15 years ago, fairly frequently. Nowadays I drive if I have to, or take a bus/lrt/komuter (horror of horrors). I never had much problems back then with drivers not wanting to use the meters or declining to go to a certain area.

Reading these articles here, I do feel sorry for the drivers. Rental of RM1200/month for a taxi? Good grief and if I gauge it correctly, that’s for the basic Proton Saga.

It disgusts how much politics has taken over what can be considered an essential service. I remember one politician a couple of years back explaining why they prefer to give licenses were given out to companies and not individuals. This was because individuals with their own licenses believe that it is their right to do as they please with said license. (yep didn’t make much sense to me – unless he was referring to sub-renting out the taxi)

What’s wrong with a little individual entrepreneurism? (ironic that licenses were issued by said Ministry) Someone in such a position would take pride in their work, put in that little extra mile simply because it translates directly to money they take home. Nowadays taxi drivers have to work like hell just to pay off the basic rental fee given to a company/association who does what exactly? “Administrative” affairs? “Call centre” operations? After all they don’t spend a single cent in maintaining the taxis (that’s the drivers responsibility) and they don’t provide fuel.

How much is a basic Proton Saga? How much is the monthly installment on maximum financing for 7 years? RM600 a month? So drivers pay double that amount for the company’s “administrative” duties.

In the end how do drivers benefit? They get to own the cab after 7 years, which they can dispose of for pure profit (7 years on the road…) and they get to rent a brand new taxi from the company for another 7 years!

Whereas if they do it as an individual, they can go through the same 7 year cycle albeit paying only half the rental they’re expected to pay. And in this day and age with the cost of living being what it is, I’m sure that would be deeply appreciated.

Viva Malaysia. My heart breaks more and more on a daily basis these days.

Firstly, who ask him to borrow? He knows how to read the news and learn the true colours of ah longs, don’t he? It is his decision to borrow. Hence, he should bear the consequences. None can help him.

Instead of continuously complaining how bad our policies on taxis, it is time for taxi drivers to be responsible. Go read Robert Kiyosaki’s Rich Dad Poor Dad and learn how to be financially intelligent.

After years of experience on public transportation, let me tell you that I rather choose to be on buses/trains instead of taxis.

Let me share an experience on a taxi in Singapore back in May. It was 3pm on a Saturday evening when I arrived at Yishun station. We were on the way to our friend’s house about a km away. My idea was a bus ride but my father insisted for taxis. So, we in a family headed to the taxi stop, which is beside the bus stop. The queue stretched into the dozens. So, we queued and more than 20 minutes passed when it was our turn. In the same time, 2 buses to the same destination has passed. What a “great” taxi service from one of the “greatest” cities in the world!!

Actually, after several trips taxi drivers malaysia in Malaysia can already cover the rent and earn extra,…hence you see them hanging around playingd am aji during noon.

Actually, my area in Wangsa Maju,Setiwangsa and Setapak have good presence of taxis and I use them from the LRT often to get home. No problem here.

We need a study to know the big picture..making assumptiuons because some drunkard taxi driver foolishly take hos own life is not approriate.


We are not blaming the taxi industry for the death of this taxi driver. Ultimately, each and every person is responsible for the choices that they make (cold as that might seem).

We are using the death as an example of what happens when people fall through the cracks of the taxi system and are not able to fairly benefit from the fruits of their labour. The example may involve loan sharks or robbery or bribery or regulatory fees or whatever it might be…but the point is still the same – many people are hurting at the hands of the taxi ‘industry’ and SPAD is responsible for finding and implementing solutions to these problems.

Regards, Moaz for TRANSIT

ps. I hope that both your and @wrongdoings_rapidKL never find yourselves in hopeless, desperate situations … and have to deal with people coldly judging your choices.

the prob is more complicated than that. Msia has high ownership of cars due to ntnl car policy + unreliable public transport. there4, when the taxi takes a fare from Point A to Point B, they don’t use meter most probably they are charging the fare double to cover in case they can’t get fare at Point B. In s/pore, almost everywhere u can find ppl flagging down taxi as car ownership is expensive.

2. due to high crime rate, taxis refuse fare late night probably fearing being robbed. so they hv to charge a high fare to cover for those idle times. this leads to a cycle where ppl don’t want to take taxi if they can afford to buy a car (who wants to risk standing for long time flagging or calling for taxi). so the higher they charge, the less passengers they get+the higher they hv to charge further.

what i think is needed
1. is to revise the meter fare rate if it is too low. in return, they must use meter

2. is there a special rate for tolls for taxis & can they be discounted from tolls? this is to reduce the cost of operating of taxis

3. some countries hv a protective glass btw driver & passenger. can this be implemented to prevent theft & robbery?

4. i m not sure if taxi drivers shld own the taxi. how many hours can they drive in a day anyway? in s/pore, cab companies would rent out the taxi to the taxi drivers. there would be 2 drivers working on shift to ensure that the taxis are fully utilized 24×7

5. touting happens in high traffic area eg KL Sentral where buses stops. this is b/cos they can be assured of passengers there. Enforcement to prevent touting must be increased. Secondly, cab rank rule must apply in those areas – i.e. if taxi driver receives enquiry they cannot refuse the fare. this will give a fair chance to all the taxi drivers there to get fare + put an element of chance that not all fare are lucrative

6. currently all taxis are anonymous as just b/cos u take 1 taxi the chance of u taking the same taxi again is very slim. we can’t identify taxis, but we can identify companies (think of it like branding). hv a rating of taxi companies which operate fairly that does not refuse fare + uses meter + is clean & comfortable + always hv sufficient taxi for reservation. so if the taxi company is rated highly, ppl would keep on calling that company to book a cab (like Comfort Delgro here). b/cos of this, taxi drivers would hv to rent their cabs also with these companies. it may not be lucrative but it ensures that they will always hv steady fares due to constant reservation by passengers

HI @William

Thanks for your thoughts.

To respond to some of your points:

1. Taxi meter rates were increased in 2009 and there was some positive response. However, the same ‘bad apples’ refused then to use the meter.

2. Taxi drivers pay a reduced toll, generally 50% less than the regular vehicle fare

3. Crime rate is an issue and the best solution for this is better taxi stands and pre-purchased coupons (for taxis at taxi stands) and of course better police work.

Aside from the internal barrier (which may be approved) there are also other solutions like robbery warning lights, GPS tracking, internal cameras, cashless payment (through TnG) etc.

The fact that these are not placed in taxis yet suggests that there is little value given to the safety of taxi drivers.

4. The concept of the owner-operator is supposed to lead to improved service but it places restrictions on how much a single driver can earn. In most cases taxis have multiple drivers. Owner-operators should be permitted to legally hire co-drivers.

5. Enforcement has usually been the function of manpower and customer behaviour (accepting the touting activities is often necessary but does not help over the long run). Coupon systems take away the need for negotiation but lead to higher fees. If customers are willing to negotiate ‘market’ rates (instead of taking the rate given) and were in an ‘equal’ position with taxi drivers then we would not be so worried about the refusal to use the meter because negotiation would simply be a contest of wills. But clearly the negotiation is not fair and reasonable.

6. There should be a rating system of taxi companies. If the industry cannot self-regulate and self-rate according to quality standards, than others must do it for them. One issue that we have noticed is that some taxi companies have different labels (e.g. the name painted on the cab is different from the dome light / window shade) so there is confusion. Whatever SPAD decides to do, there will have to be a consistent standard. Another issue that we have noticed is that some ‘companies’ have strengths in certain territories.

Finally, there is the issue of not knowing if your taxi driver is willing to travel or intends to stay locally. Some kind of information system would be very helpful, or a solution where one can know where to go for local taxis and where to go for meter taxis.

Regards, Moaz for TRANSIT


How, exactly, is this proof of the incompetence of the LTA? It appears to us that the article is highlighting criminal behaviour on the part of taxi passengers. This is really a case for the police, not the LTA.

Regards, Moaz for TRANSIT

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