Taxi drivers lose their share of income with arrival of ride-hailing services

Updated 07 May 2018

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Carrying luggage on rooftop is still old taxis’ exclusive domain.—White Star
Carrying luggage on rooftop is still old taxis’ exclusive domain.—White Star

KARACHI: With the advent of Internet-based ride-hailing services, drivers of yellow/black and yellow cabs of Karachi are seen complaining of a severe decline in their business.

Old taxis, that were once a common sight in the city for decades, have seen themselves being effectively pushed out of today’s highly competitive transport market, leaving their drivers with only a fraction of the income they used to have in past.

Shahzad Muneer, a driver of a yellow/black cab, says that he started driving a taxi in Karachi back in the early 1990s. He says that it was a good time for being in this business as their taxis were relied upon by a huge number of population for their daily needs.

Hailing from Kasur in Punjab, Muneer, now in his late 40s, says that before the arrival of ride-hailing services, the taxi drivers could earn as much as Rs3,000 a day, which was sufficient for their families after taking out expenditures.

“Now it is a maximum of Rs1,000; on some days, we don’t get any rides at all,” he says.

He regrets the fact that thousands of taxi drivers across Pakistan have been left behind in a transport market that is increasingly technology-driven.

“The drivers [of old taxis] are now forced to look towards other options because they cannot run their households on the meagre sums that they make,” he says.

Mohammad Aurangzaib, a taxi driver who mostly waits for his passengers at the Cantonment Railway Station in Karachi, lists other problems that his brethren in the profession have been facing.

“Because our taxis are painted with specific colours identifying them as a taxi and have commercial number plates, our movement is restricted as compared to the drivers of ride-hailing services,” he says.

He, for example, says that the drivers of ride-hailing services were not subject to government taxes (twice a year for old taxis) and were not liable to regularly obtaining a route permit and a fitness certificate, both of which have their associated fee.

“We have faced a setback in terms of income, and at the same time we have to pay different fees, which the drivers of these services don’t pay,” he says, “is it not injustice?” he questions.

He thinks that ride-hailing services were at an advantage because they were treated as private vehicles and had no commercial fees to pay.

A common complaint of citizens against the old taxis is their decrepit condition. Lack of standardised fares is another matter of contention that turned their old customers away from them as soon as ride-hailing services arrived.

Naheed, a regular user of ride-hailing services, says that the services have given her freedom to travel anywhere at any time. She had been a user of the conventional taxis in past but gave them up in favour of ride-hailing services.

“You get a breakdown of the fare on your phone, you know what exactly are you paying for, even if its peak charges, they are not hidden,” she says.

“In absence of metres, the taxi driver could ask you for any arbitrary amount, and then either you had to haggle with them or end up paying excessively,” she says, adding that the ride-hailing services took her to same distances in a cost lower than a taxi or a rickshaw cost.

Hufsa, another user of ride-hailing services, seconds her views. As someone who scarcely used the old taxis but regularly uses ride-hailing services, she says that her parents would never let her use conventional taxis due to safety concerns, even if it meant cancelling the plans.

“For a city that has no proper public transport system, these services have filled a void that kept citizens hostage for many years,” she says.

Muneer doesn’t disagree with this but has a different take on it. “Yes, our taxis are not in good condition, but it is because we are not well-off enough to buy new cars,” he says.

“We are professional taxi drivers who have been in this field for decades while the drivers of ride-hailing services are mostly part-timers driving brand-new, expensive cars which we cannot afford,” he adds.

Mohammad Ishaq, who has been driving a taxi for 26 years, says that the yellow and yellow/black cabs never won the confidence of customers because the public did not trust the metres.

Sitting on the trunk of his sedan yellow cab outside Zainab Market in Saddar area of Karachi, Ishaq says that the public always viewed the metres with scepticism and insisted on negotiating a flat rate instead of per kilometre charges.

“Now these companies charge you extra in lieu of waiting time and peak factor but people are happy paying these additional charges,” he says.

“Our metres only charged on a per kilometre basis, but even then public complained that we tamper with the metres,” he adds.

Apart from the public doubt on metres, Ishaq says that the government did not revise their fares regularly due to which it was not economical for them to operate on government-approved rates.

Ishaq says that their customer base has rapidly shrunk in last two years, with now only people from lower-income areas of the city or those with extra luggage hailed the yellow cabs because of the luggage holder on their roofs, which is non-existent in cars of ride-hailing services.

Other taxi drivers agree with him, and add that the only lucrative spots left for them in the city were the railway stations, from where they could pick people coming from other parts of the country, often with lots of luggage.

“Even the airport is now out of option for us as we cannot enter the airport if we don’t have a passenger, and we cannot pick a passenger from the departure lane,” says Muneer, lamenting that the drivers of ride-hailing services could portray themselves as a private car.

“They can enter any government building but almost all of the government buildings have a restriction on a taxi entering the premises.”

Taxi drivers say that a government-sponsored scheme to replace their old cabs with new vehicles, introduction of uniform, updated fares, and bringing the ride-hailing services under same regulations as them could help them step back in the business, otherwise thousands of the taxi drivers would ultimately have to abandon their cars and sell them in scrap.

Dr Noman Ahmed, chairman of Architecture and Planning Department at the NED University of Engineering and Technology says that the private sector and microfinance banks should come forward to offer new vehicles to the taxi drivers so that they could stay in the competition.

He stresses the need of a collective action for ‘fleet replacement’ of these taxis. “Throughout the world, such an exercise is always possible through collective actions because it’s not economically viable for individuals to replace their taxis,” he says.

Dr Ahmed further says that with the advent of ride-hailing services, a clear demarcation between customers bases had been observed, with traditional taxis now only used by low-income citizens of the city because they are not able to fulfill the demands of clientele in other, more developed parts of the city, and adds that there is a need of regulating the ride-hailing services.

Sindh Transport Secretary Saeed Awan says that the government is working to bring the ride-hailing services under the umbrella of same laws and taxes as the traditional ones.

“The government [of Sindh] has recently signed a memorandum with Uber, and we are in process of bringing Careem under a regulatory framework too,” he says, adding that after such an understanding is reached, the cars of these services will have to display a mark classifying themselves as a commercial vehicle.

He concedes that the business model of these services is too innovative to classify them as traditional taxis, but says that the government is actively working to find a way.

He rules out the possibility of any programme to revamp the old taxi services, and says that the government can only act as a regulator among commercial services, but not support one over the other.

“Our first priority would be to provide a mass-transit system for the citizens which would be less expensive for the public, and more efficient in terms of capacity,” he says, “we are already working towards achieving that,” he adds.

Published in Dawn, May 7th, 2018