The emergence of the private hire car industry has provided a lifeline to many locals to fulfil their asipiration to own a car and earn a meaningful income without having to take on a customer facing or operations job. Can this be a viable long term (i mean at least 2 – 3 years, not evening talking about 5 years) option?
Private hire car companies see its “contractors” as just revenue streams. They take all the upside, while the contractors take all the downside risk. They merely provide an app, which is nothing more than a booking interface to connect customers to drivers.
In a rational world, they should be charging a booking fee/transaction fee of not more than 2-3%, akin to a Master/Visa/Nets transaction. But in our bubble app economy, they take a share of the revenue, and the driver (the revenue generator) becomes the servant. Just imagine in the retail context, Master/Visa/Nets takes a share of the sale, would the retailers still use their services?
I know its not an apple-to-apple comparision, but you get the point. Then why are people still driving Uber/Grab? Well, based on my totally bias and narrow minded view:
1. Many of the private hire drivers are stuck in the Uber/Grab trap, where they take on the committment to hire a car, while striving for the “incentives” to meet the car leasing commitment. In the meantime, they may earn an income of $2 – 3k (without any CPF in that matter), which is definitely a reasonable income to sustain a lifestyle in Singapore, but its definitely past the heydays of at least $4k a month as advertised (theortically, you stilll could, but you might as well eat and sleep in your lovely car).
2. There is simply a segment of the drivers who can’t obtain a taxi vocational license as they are not yet 30 or meet the entry requirements. After having experienced the “freedom” of driving and owning a car, they can’t get out of the Uber/Grab trap, and since they can’t swtich to become a taxi driver, they remain and slog it out.
3. When you’re driving the whole day and constantly looking at your mobile to wait for your next assignment in order to meet the incentives target, I don’t think the drivers can do career planning, attend courses to acquire new skills, or schedule interviews.
Frankly speaking, I think its totally great that there are more options for commuters. But maybe its time for us to spare a thought for the drivers, who have been duped into an assignment (its not even a job) which provides enough to feed the family, with zero income security or welfare. What a waste of talent……