Thursday, November 01, 2012

Taxi Drivers can earn $6,000 monthly? Yes if drive 490km everyday!

Since news of a taxi driver who can earn up to $6,000 in monthly income was reported in the Sunday Times last week, there has been a flurry of comments both online and offline as to whether a taxi driver can really command that high income in a month- CONSISTENTLY! Yes, we mean CONSISTENTLY i.e. getting that $6,000 salary -which is approximate to the monthly salaries of many young Scholars- month after month.

As a logical person, I believe that we must back what we think and speak and in this case, since the whole puzzle of a taxi driver’s salary revolves around Mathematics, let us use Mathematics to validate whether the Sunday Times article could be justified.

To start off, let us formulate a scenario with the following parameters for our calculation:

a) The cab will be an ordinary cab as most people take ordinary cabs.

b) The route taken will be the longest non-stop stretch from East to West of Singapore via Expressways. With the East to West of Singapore measuring about 49km, we will, for the sake of this case, have a 1-way trip defined as that of the taxi driver fetching a man from Changi Airport and dropping him at Jurong OR vice versa

We will assume each 1-way trip to last 1 hour and the cab drives at the average of 60 km per hour. With 49 km as the distance travelled by the car in a 1-way trip, this will give us 49 minutes of travelling time and 11 minutes of waiting time. The 11 minutes of waiting time is reasonable for waiting time at traffic junctions as not all of each 1-way trip will be made on Expressways.

As for the rates, since ComfortDelgro is the largest taxi chain in Singapore, I will use its taxi rates as indicated in this link:

As we are using a normal cab for our case, there will be 4 components of the taxi fare (what the taxi drivers will earn per trip), these are:

a) Metered Fares

b) Booking Charges

c) Surcharges

d) ERP/other charges

As the booking charges, surcharges and ERP/other charges depend on a raft of factors like place and time of embarkation; the timing of the booking and other factors, for simplicity sake, let us just assume that the taxi driver will just earn the metering charges, though we must not forget our calculated revenue will be the minimum the driver will get per trip as we have not included all the aforementioned additional revenue he may get.

Let us now calculate the metering charges per 1-way trip using the rates of ComfortDelgro:

a) Flag down charge: $3

b) First 10 km = 10km/400m x $0.22= $5.50

c) The remaining 39km= 39km/350m x $0.22= $24.50

d) Waiting time charges= 11 min/45sec x $0.22= $3.30

Hence metering charges per one-way trip = sum of a) to d) =$36.30

Therefore the taxi driver will earn a minimum $36.30 in an hour per 1-way trip as defined above!

However, a taxi driver has to pay for both rental and fuel cost at an average of $150 per day, this will work out to be around 30 x $150 = $4,500 that the driver has to pay out of his pocket if he drives his taxi for month (30 days).

So for a taxi driver to earn $6,000 per month, he will need to earn $10,500 in a month so that he can have $6,000 as his salary after paying $4,500 for rental and fuel cost.

Like what we have seen, the taxi driver can earn a minimum of $36.30 at the minimum per East to West trip which takes an hour or vice versa, this will means that the taxi driver will have to drive his taxi East to West or West to East for $10,500/$36.30 = 290 hours in a month, this will translate to an average of 9.7 hours (around 10 hours) of driving by the driver in a day either from Changi Airport to Jurong or Jurong to Changi Airport.

So is the scenario I have described possible? Yes, I think so. Remember, right now, Singapore is revamping our Jurong Lake District which will boast many hotels? So if there is a strong tie-up between our airport and the hotels in Jurong and the Jurong hotels have a roaring business from booking by the travellers using our airports, then the reality of a taxi driver ferrying tourists for 10 hours in a day from Changi Airport to the hotels in Jurong Lake District (and vice versa) can be a reality! Also, we must note that with all the surcharges, etc, the taxi driver may not be need to work for more than 10 hours to earn $6,000 or he can earn more than $6,000 in 10 hours.

10 hours of work for a taxi driver can be arranged such that the hours are not tiring to him and he can have a very good work-life balance as follows:

6 am to 11 am: 5 hours of driving taxi

11 am to 12pm: Lunch

12 pm to 2 pm: Rest

2pm to 7pm:    5 hours of driving taxi

7pm:                  Home

Even without my above scenario of driving only on long expressways, I think a taxi-driver can earn at least $6,000 per month if he manages to clock in 49km/h x 10 hours =490 km in a single day on a mix of normal roads and expressways, but that will mean more than 12 hours of driving in a day which is really physically and mentally taxing!

I think the Sunday Times article really give people the impression that taxi drivers can earn quite easily $6,000 when in actual fact this is not the case unless the driver drives and “cheong” like what I describe above.

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