Subsidy is bad. Competition is good. Honesty still exist.

I know of many horror tales about taxi drivers in Malaysia. My ex-country manager was charged RM25 for a 800m journey. All other taxis she asked told her that’s the fare! I have never used UBER and have used Grab only a few times with the last one being a few years back. These days, I would WhatsApp a taxi driver whom I think is sincere and honest. Yes, he is a usual red and white taxi driver. He told me that it’s getting harder these days as the number of customers have dropped with UBER and GRAB. I have many friends who kept telling me that UBER and GRAB is revolutionising the taxi industry. I do think they help make everything more efficient which is great. As for other stuffs, let me tell you my personal views.

Competition should always be fair. Organisations should be more effective and efficient and continue to improve their services so that it is better than the rest. They should however not continue to use huge fundings to fund their expansion and in the process killing many competitors who do not have the same amount of funding. As at recently, UBER is still reporting huge losses. In brief, their current model is not a profitable one. Yes, the only reason why you can pay such low fares (sometimes free) is not because the driver is working for fun or charity. It’s because UBER got more fundings and could continue to subsidise their expansion plans. In August 2016, it was reported in many media that UBER has suffered US$1.2 billion loss within H1 2016. Here’s one of the report.  

A friend who’s Senior Manager in a multinational remarked recently that startups would always be losing money in the beginning. Well, UBER started in 2009. So, how long should startups continue to lose money? This is not an article to tell you to stop using UBER. Everyone should continue to enjoy cheaper rides, even free ones for some cities in Malaysia. I just wanted to clear the point about fair competition and also some good, honest and sincere taxi drivers. We can always say these are the minority but fyi, they still have a life and even a family to feed. My favourite taxi driver? Well, he has 5 kids. Happy riding / hailing.

written on 2 Dec 2016

Next suggested article: Medical fees will always be more expensive in future. Think

 

 

2 thoughts on “Subsidy is bad. Competition is good. Honesty still exist.

  1. Economy-sharing platforms such as Uber and AirBnB will disrupt the economy. There are many beside these two; digitisation, robotism,artificial intelligence and many more. They are known as disruptive technologies. Jobs displacements are part of this evolution of change.

    In the eighteen century, when seamstresses were common in small towns and villages until the advent of sewing machines. The automation such as the invention of the machines displaced all the seamstresses and related jobs then. There were riots, protest and rallies in many parts of the world during the industrial revolution. It phased out seamstresses, horse drivers and many others. Ditto for chariots drivers, and factories manufacturing horse whips, chariots, horse carriages etc.

    Today, Uber and AirBnB, likewise will disrupt many jobs. Worse, when driverless cars or vehicles become common, all drivers will be out of jobs, AirBnB will close down most hotels and many jobs there will be lost. DIY platforms of robotism will displace insurance agents, property agents, trading brokers and many sales jobs. Medical industry is also endangered.

    Singapore Govt is already preparing its citizens instead of fighting technologies. It adopts Tai Chi method such as education of three levels; the young, the workforce and the senior staff. The evolution of technologies came so fast that Singapore has no choice but to do it quickly. It appoints two Ministers of Education, one in charge at university level and another in charge of primary and secondary levels. Minister of Manpower is in charge of educating current workforce to transit to new jobs.

    • Thanks Fred. Always love your explanation. I think just like you, I love disruptive technologies. I do not however support continuous subsidising. Focus on the product, not on simple growing and trying to kill off competitors by using just money. In the end it’s no longer about a better product. It’s about who can last longer with more funds. No comment on any government programmes regardless of country. Transiting to new jobs are never easy because it’s not just about the government but also about the people’s readiness too. Suffice to say, change better come from us rather than forced.

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