Are taxi drivers better off delivering goods or cruising empty?

August 3, 2017

 

By now, you might have heard that Amazon roped in taxis and private-hire vehicles to make deliveries in Singapore.


Amazon Prime Now service launched in Singapore last Thursday (27 July) by online retail giant Amazon. One of the key features of this service is that it promises one to two-hour deliveries (depending on the area you live in).

 

There was a offer of a $20 discount off every new customer’s purchase by Visa.

 

This was particularly enticing for many Singaporeans as it would give them a 50 per cent discount since delivery is free for purchase of at least $40. So they only had to pay $20 if their shopping cart did not exceed $40.

 

Did Amazon underestimate Singaporeans’ appetite for good deals?

 

Demand was so overwhelming that the Visa20 promo was redeemed too quickly - apparently some people created a few Amazon accounts and redeemed the promotion multiple times.

 

Consumers were also notified that “delivery is unavailable” hours after the app was launched and some orders were not delivered within one to two-hours as promised.

 

As a result, there was a barrage of complaints on the Amazon Prime Now Facebook page. Clearly the delivery infrastructure in Singapore isn’t as well-oiled as it is in the United States.

 

Teething problems aside, there is “larger” issue that needs to be looked into.

 

While it seemed like a brilliant idea to engage taxi drivers and private-hire cars to solve the temporary delivery issues - tapping on current available resources, Amazon almost got taxi and freelance drivers into trouble.

 

According to the Land Transport Authority (LTA), taxis and PHVs cannot only be used to convey goods, although the person who hire them may carry goods.

 

To this, taxi giant ComfortDelGro defended its drivers by claiming that they “operated like any normal taxi bookings with at least one passenger on board each taxi.”

 

The National Taxi Association (NTA) lobbied for the rule to be changed as it believes that delivery services would not adversely affect taxi business.

 

Executive Adviser of NTA, Ang Hin Kee, called on the Government to conduct a trial to allow taxi drivers to deliver goods. He also suggested there would be overlap of resources if we can’t allow taxi or PHV drivers to do delivery services.

 

According to Mr Ang, there is excess capacity during off peak hours. That means there are cabs cruising empty along the roads.

 

One of the biggest bone of contention is the insurance issue. Drivers will not be insured if the goods are damaged or destroyed when the vehicle catches fire.

 

However, this issue can be resolved by having a broader insurance coverage to allow carriage of goods.

 

Shortly after NTA’s statement was released, LTA changed its position by saying that they will monitor trends to see if regulations need to be reviewed.

 

Did LTA soften its stance after hearing NTA out? Whatever it is, NTA did a great job by protecting the interests of taxi drivers. Given the stiff competition between taxis and PHVs, the supplementary income from making deliveries will definitely help taxi drivers.

 

We heard Amazon was paying delivery drivers in Singapore $25 per hour.

 

Now if it’s legit for taxi drivers to do delivery services as a sideline, taxi companies should seriously consider evolving their traditional business and set up their own delivery fleet.

 

When taxi companies have their own delivery fleet, they can work with companies with e-commerce services like Amazon, FairPrice, Redmart and Honestbee. #justsayin

 

If there are enough taxi drivers who don’t mind doing something different like providing delivery services, we may be left with a small group of people who prefer driving taxi.

 

But if that ever happens, this group of drivers will be your elite drivers who provide top-notch customer service and are like ambassadors of Singapore.



 

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