Time for ride-sharing services to pay up

Time for ride-sharing services to pay up

Uber and Grab have run into disputes from local taxi drivers, and the Department of Land Transport thinks the solution is Taxi OK. And Taxi VIP. (File photo)
Uber and Grab have run into disputes from local taxi drivers, and the Department of Land Transport thinks the solution is Taxi OK. And Taxi VIP. (File photo)

One typical habit of Thai officials is that if they can't solve an existing problem, they find a new one to solve.

One such problem includes the contentious ride-sharing business. Disputes between local taxi drivers and the ride-hailing service Uber have intensified in recent years as Uber drivers eat into their business.

Arguments between enraged taxi drivers and Uber car drivers have been caught on video and posted online.

Enraged cab drivers have attempted to disrupt ride-hailing drivers. They have encircled the targeted cars, intimidated drivers or even attacked them. There are also cases where drivers have attacked the wrong targets.

Soonruth Bunyamanee is deputy editor, Bangkok Post..

These chaotic incidents have happened not just in Thailand but several other countries where disruptive technological services such as Uber and Grab Car have hit the conventional taxi business.

The Department of Land Transport (DLT) has branded the ride-hailing services unlawful. It has launched tougher operations to crack down on "illegal" Uber and Grab Car services. Officials even introduced sting operations by posing as passengers and calling ride-hailing drivers and catching them.

Several measures have been initiated to no avail. It appears many passengers still prefer using ride-hailing service to conventional taxis.

Everyone knows the reason why.

As the department realises it can't convince people not to use ride-hailing services, it has come up with a new idea to upgrade conventional taxis to enable them to compete with Uber and Grab Car.

The department has been developing the "Taxi OK" and "Taxi VIP" projects to offer "new generation" taxis.

With technological development support from King Mongkut's Institute of Technology Ladkrabang, Taxi OK and Taxi VIP will offer services via mobile apps which will allow the DLT to track taxis' locations to improve their safety and reliability.

Like Uber or Grab, the app will allow passengers to book reservations, rate drivers and file complaints. It will also include an emergency push button that can be used by both passengers and drivers to flag harassment, improper charges, or ban drivers or passengers from the service, according to the department.

Other proposals include installing CCTV cameras and GPS systems linked to the DLT's taxi operating centre. There is a car reader programme, with cameras, that will help verify the driver's identity. The driver's behaviour will also be recorded in the system.

For Taxi VIP, it will offer passengers larger, more luxurious and higher-performance cars, no doubt to be accompanied by a higher fare.

The services are expected to start in November.

The DLT is working on the service with good intentions. But I'm wondering whether the DLT's new-generation taxi service will really attract passengers away from the ride-hailing services.

Under the projects, taxis that have been in service for more than 12 years will be removed from the roads. Now there are about 11,000 old taxis. The plan is causing worry among drivers about cost and affordability if they are to join the new-generation taxis project.

In fact, the underlying problem with conventional taxi services is human behaviour, not technology.

As long as conventional taxi drivers are not aware of their duty and responsibility, and keep turning down customers, demand unusually high fares, cheat by taking passengers on lengthy detours or illegally modify their fare meters, and bully passengers, the department's move to force taxi operators to offer better cars with new technology will not help.

Look at the current taxi service. The DLT requires every taxi cooperative to establish a communication radio centre to track their drivers and provide a convenient service and safety to customers. The radio centres were established but they are not exploited to fulfil the objectives. Most end up as a forum where taxi drivers chat idly among themselves.

We know driving a taxi in Bangkok is a stressful career due to traffic congestion, the risk of being robbed, and unfair rental charges imposed by taxi operators.

But it is not an excuse for those taxi drivers to withhold a decent service from their customers, even if they make up a minority of taxi drivers on the road, most of whom are honest, hard-working people.

Personally, I don't support ride-hailing services.

Taxi drivers hold up placards opposing ride-sharing companies Uber and Grab Car in front of parliament in June. Thiti Wannamontha

Some customers have started to complain about these taxi drivers. More importantly, in my opinion, Uber and Grab Car have made huge profits from doing business in Thailand. They should be required to pay tax to the country.

This includes their drivers who earn extra cash without paying tax.

Uber claims its service is not a taxi as such but a ride-sharing service. But we all know it is practically an unregistered taxi services through mobile app technology.

Competition between Uber and Grab Car drivers and conventional taxi drivers is unfair. The conventional type is faced with the cost of registration, including a taxi licence, insurance, and meter device, compared to those in the so-called ride-sharing business.

The ride-hailing service operators have called on the government to legalise their business here but say little about their and their drivers' responsibility to pay tax. Their business should be legalised if they and their drivers are regulated under the same laws and subject to tax, like other taxi drivers, otherwise they should stay "illegal".

It's good to know the Revenue Department has a plan to tax online-based businesses by striking a 15% withholding tax rate on online transactions. Ride-sharing services such as Uber and Grab Car are among the targets.

In practice, it is not easy to identify which money transfers are for online trading if those traders want to avoid taxation. But we have nothing to lose but trying the new tax. The department estimates the value of online purchases in the trillions of baht, while online advertising is valued at around 10 billion baht.

According to the Revenue Department, Uber is not a transport service provider -- such entities are exempt from consumption tax -- but a business that charges fees for a management system and is thus subject to value-added tax. The department estimated Uber earns 2 billion baht a year, and the company has never paid tax to the state.

I don't know if the DLT's Taxi OK and Taxi VIP projects will work but at least those running a business and working as drivers under the projects are regulated under laws and have an obligation to pay tax.

Soonruth Bunyamanee

Bangkok Post Editor

Bangkok Post Editor

Email : soonruthb@bangkokpost.co.th

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