Business Governance Opinion

Disrupt the Taxi Industry with Innovation, or else keep fighting with Unions, the Maldives Story.

traffic on sinamale bridge
With the opening of the bridge connecting the capital city Male’ with main International Airport in Maldives and Hulhumale, the planned city — the taxi drivers started to charge between MRF 100 to MRF 150 for a trip between these cities & airport. The Government, in order to regulate the market with the growing concerns of high charges, made the following rates.

– Within Male’ City – MVR 25
– Within Hulhumale’- MVR 25
– From Male’ to Airport and vice versa- MVR 35
– From Hulhumale’ to Airport and vice versa- MVR 35
– From Male’ to Hulhumale’ and vice versa- MVR 40
– Extra MVR 5 can be charged if the journey is made after 00:00 to 06:00 and if luggage is loaded.

Well that was that and nobody paid any heed and continued charging whatever they pleased and this was when government intervened again last week, with a stricter patrolling by Police and penalising the drivers who charge above the regulated price. This became a huge cry and taxi drivers went on a strike and eventually, the government swayed. The price has as of today reached to a new level of MRF 200 for crossing the bridge.

Let me put this into a perspective with some assumptions!

Assuming a taxi driver spends 9 hours providing his service and take up to 4 trips per hour, which makes it to a total of 36 trips per day, he would be making MRF 900 per day (considering the base value per trip as MRF 25 as regulated by Transport Ministry), which means, they would earn approx. MRF 21,600 per month (that’s considering they take a day off per week).

Assuming that a driver makes 900 per day, they would be making MRF 100 per hour. Assuming that they drive 20km (size of the city) per hour for making these 4 trips, they would be approximately burning 2 Liters of Petrol per hour, considering that the worst fuel-efficient cars burn a litre for every 10.5Km, they would be spending approx. MRF 20 on petrol and hence the hourly rate of the driver after deducting the petrol would be MRF 80 per hour, if they leased the car, they would be making a certain agreed amount to the owner, which I am not sure how it works here.

Based on this assumption, they would be making MRF 1.4 per minute they spend in the taxi providing service. And from Rasfaanu to Airport its approximately 5.5km and that means they can go and come back without a passenger also for a litre of petrol. And the drive from Rasfaanu to Airport is approx. 20mins and that means It would be MRF 28 and even if we just give it 30mins for the trip both ways, it would be MRF 40 per trip. And even if you decided to add a litre of petrol to this, that’s just MRF 50.

From Rasfaanu, Male’ to Bread Matters Platinum in Hulhumale it’s approx. 10 Kms and takes roughly 30mins and if we calculate this, it would be MRF 42 and even if we consider that they take an hour to drive both ways, it’s going to be MRF 80 (the hourly rate). These two points are taken because they are the farthest points in the two cities.

Now, this is why we need metered Taxi in the Maldives like anywhere else in the world and not flat rate prices and the assumptions made here is not even accurate.

I have personally seen the efforts made by the previous minister to correct this sector, the corruptions are not at the top management alone, it’s at the person at the lowest level, whether it’s the examiner for license or the inspector for garages or someone at the top who pushes it further for importing vehicles.

The current minister is the first one who has dared to come out in Public with all these issues and talk about and try to find solutions, but it was sad to see that video clip of how the drivers raised their voice and showed their supreme authority.

In most countries, this has become a nuisance, I bet most of you must have heard the stories about taxi service in the region or elsewhere and that’s why the government spend on building a strong public transport system, which the public can rely on. Trying to reduce the price or bring a flat rate is never the solution without creating a strong robust public transportation system.

The whole reason why taxi-hailing apps came into existence is that of these growing reason worldwide, but then again they had metered rates fixed by the regulatory authority, so if we are really looking for a solution, then it boils downs too.

1. A systematic and affordable Public Transportation System

2. Opening up for innovations in the sector, like taxi hailing apps.

Previously few disrupters tried implementing taxi-hailing app in the Maldives, like Ride. Mv and Koba Taxi, but the government put conditions on how it can be used, with uniforms etc and with a vision of a more privatised investment model, resulting to which the idea was just dropped by the enthusiasts entrepreneurs.

If we want to bring a solution to this issue, the government need to be more open and let the industry be disrupted with innovative solutions.

Full details are available at the link below:

Source URL: Medium

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