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Ensure success of “Private Hire Vehicles”

POSTED BY CBT Team ON 07 October 2014

KLIA2 taxi

As part of its Taxi Transformation Plan, the Land Public Transport Commission (SPAD) is streamlining the various categories of taxi licences, commonly referred to as permits.

Currently, the three classes of metered taxis are budget, premier and executive. They are categorised under Teksi.

More than 99% of the 43,098 metered taxis are based in Kuala Lumpur, Selangor, Penang and Johor. Only 116 are in eight other states of peninsular Malaysia.

Non-metered taxis, numbering 16,012, are categorised under Kereta Sewa and are found in every state. Some operate short distances while others for long trips to other cities or towns.

Kereta Sewa should not be confused with Kereta Sewa Dan Pandu which are “Hire and Drive” vehicles that are hired to customers without drivers by car rental companies.

Recently, SPAD pronounced that self-drive vehicles cannot be used for chauffeur-drive. It was allowed when licences were issued by the Tourism Ministry.

There are 2,557 airport taxis in the Klang Valley and are categorised under Teksi Lapangan Terbang with budget, premier and family service determined by vehicle size.

The last category is limousines or luxury taxis under Teksi Mewah. The minimum engine size for these sedans is almost 2 litres.

All metered taxis are being transformed into Teksi 1Malaysia (TEKS1M) and the only model allowed is the elegant brown Proton Exora running on budget fares.

Vehicle price for the Exora is doubled that of Iswara and as such, cabbies driving taxis reaching 10 years are reluctant to switch to TEKS1M.

Budget taxi fares were supposed to be increased early this year. I had proposed that fares based on distance be raised by 44% to RM1.25 per km and time by 40% to RM24 per hour.

Current executive taxi fares are RM2 per km and RM34.28 per hour. These drivers are getting apprehensive in switching to TEKS1M next year when their permits expire.

To be fair, executive taxi owners should be given the option of converting to “Private Hire Vehicle” (PHV) that SPAD will roll out next year, as many are operating from leading hotels.

Likewise for airport taxis operating budget service and not limited to those providing premier and family service, as there are too many budget taxis in the Klang Valley.

SPAD should be lauded for not issuing additional budget taxi permits since its inception in early 2011.

It should also tread carefully in granting new PHV licences as the defunct LPKP had succumbed to pressure and flooded the market with taxi permits.

Several challenges must be overcome to ensure the success of consolidating limousines and airport taxis under PHV, especially excise duty exemption and motor insurance cover.
Limousines are the only taxis not granted excise duty exemption and cover is much higher at RM102.50 per thousand ringgit insured compared to RM69.80 for normal taxis.

Without excise duty exemption, no airport taxi operator would switch to PHV, and insurance cover is only available for categories stated in the Motor Tariff that has remained unchanged since the 1970s.

In reality, the risks for limousine taxis are lower and PHV can share the same premiums as normal taxis. This can be effected by a directive from Bank Negara.

Likewise, the Customs need a circular to allow excise duty exemption for PHV which may be tabled in Budget 2015.

If so, PHV operators need not buy used vehicles as brand new cost less without excise duty.

It will also attract individuals with no intention to provide chauffeur-driven service to apply for PHV licence so as to own luxury vehicles cheaply and not confined to tax-free Langkawi.

PHV should be determined by body instead of engine size. For sedans, they should be D, E or F-segment as smaller C-segment cars can have engine size up to 2.0 litres.

Unlike taxis that ply the streets in search of passengers, PHV are only on the road when booked and are in good condition even after 10 years.

Therefore they should be allowed to operate up to 14 years with stringent and quarterly inspections after 10 years.

The registration number for PHV should be similar to limousine taxi, without an additional taxi registration starting with H.

The number plates for new limousine taxis are white background with black letterings. They are easily recognisable from a distance, such as toll plazas. It should be used for PHV.

A specific colour for PHV is superfluous. Displaying signs in or outside the vehicle denoting that it is a PHV or a sticker directing complaints to SPAD are unnecessary and in poor taste.

Also, making it mandatory to go through a despatcher can backfire as prohibiting a foreign businessman to book direct with the driver do not bode well on the image of our nation.

Similarly, it would be unnecessary for PHV to have a fixed base, such as at 4 or 5-star hotels, as bookings can be received instantaneously from anywhere around the globe.

Likewise, not allowing PHV to pick up passengers with prior bookings at airports can adversely affect our tour operators and tourism industry.

Only those who are trained as tourist drivers are capable of providing the level of service promised to upmarket tourists.

As PHV allows up to 10 passengers, it would have an advantage over tour vans licensed under Bas Persiaran which require tourist guides but at additional cost.

YS Chan,
Kuala Lumpur

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