Legalising ride-hailing services a god-send to economy, study shows

[snoop1130]

Legalising ride-hailing services a god-send to economy, study shows

By THE NATION

 

Dr Suthikorn Kingkaew

 

Ride-hailing services contributed Bt21 billion to the Thai economy last year, a contribution that is expected to reach Bt120 billion by 2025, according to a study conducted by Thammasat Consulting Networking and Coaching Centre (CONC Thammasat).

 

CONC Thammasat said on Thursday (September 26) that the study focused on the role ride-hailing services have played in driving the country’s economy and the necessity of developing sustainable guidelines and regulations. The study also provided five key actionable guidelines and best practices for the government to consider as it works towards legalising ride-hailing services by March 2020.

 

Dr Suthikorn Kingkaew, director of CONC Thammasat which comes under the university’s Faculty of Commerce and Accounting, said ride-hailing services have changed the way people move – not just in Thailand, but also around the world. It has naturally become more popular in today’s digital age, where mobile and internet penetration is high, and people are more receptive to using technology to make their travel hassle free.

 

Thailand’s urban population is expected to grow from 50 per cent to 73 per cent in the next 30 years, which means people’s need for accessible, seamless and safe transportation will continue to rise. Hence, it is time for the government to legalise the industry and integrate it with the public transportation ecosystem.

 

The ride-hailing industry currently accounts for 6 per cent of Thailand’s ground transport sector’s GDP, and once it is legalised, it is expected to account for 20 to 25 per cent of the industry, contributing Bt120 billion by 2025.

 

In 2018, an estimated 2.4 million passengers per month were served by the ride-hailing industry and this is expected to rise to 11 million passengers per month by 2025. The number of drivers providing services in this industry is also forecast to rise from 105,000 per month in 2018 to about 590,000 per month by 2025, which means more people will be given access to new income earning opportunities.

 

“Our research shows that Thais want the service to be legalised, so they have greater peace of mind,” Suthikorn said. According to public polls, 95 per cent of respondents want the ride-hailing industry to be legalised, while 77 per cent want the action to be taken immediately.

 

Thailand is one of the last three countries in Southeast Asia which has yet to legalise the industry.

 

“The government recognises the benefits that ride-hailing will bring to people’s daily lives and sees how the service can complement the entire public transport system. The next crucial step will be to develop fair and sound regulations that safeguard public interests and yet allow innovation to thrive,” he said.

 

Findings from CONC Thammasat’s study quantified the economic and social impact ride-hailing services have on Thailand, reflecting opinions from 2,000 passengers and drivers collected in public polls conducted from August to September.

 

Most passengers said ride-hailing services has made their daily commute more convenient and given them greater peace of mind due to higher safety standards.

 

o 92% agreed that ride-hailing service is safer than other alternatives;

 

o 95% said ride-hailing services connect them easily to other modes of transportation;

 

o 77% say booking a ride through ride-hailing apps reduces their waiting time;

 

o 86% said ride-hailing services allowed them to spend more time on work or other activities during the ride.

 

Drivers, meanwhile, found ride-hailing services as a new stream of income that provided them with greater financial independence.

 

o 60% of private car drivers surveyed were either unemployed or retired before they found an opportunity to earn through ride-hailing services;

 

o 99% of taxi drivers said that the ride-hailing service gives them more passengers and helps them earn above the amount they get from being flagged down;

 

o 94% said the additional income has given them greater financial independence and helped them clear their debts.

 

Social Sector

 

Apart from offering greater convenience to passengers, ride-hailing services have also raised the bar for safety in Thailand through live location tracking and sharing GPS data, offering SOS assistance by linking up with the police through the app and other technological advances such as facial recognition and telematics that aim to protect the driver and passenger.

 

Economy

 

Ride-hailing services have directly contributed Bt21 billion to the Thai economy in 2018, not including the positive knock-on effect on the wider economy as it improves drivers’ livelihoods and boosts their spending power as consumers.

 

Tourism Sector

 

Tourists are increasingly relying on ride-hailing services, as 75 per cent of foreign visitors travel in small groups or solo, as the proportion of large groups has fallen to 25 per cent. Ride-hailing apps also help bridge the language barrier through in-app chat translation features and eliminate people’s frustration of having to haggle with drivers by displaying the price upfront before the ride is booked.

 

CONC Thammasat, meanwhile, has also come up with five key guidelines and best practices to help the government develop a regulatory framework for the industry:

 

1) Setting up basic standards to ensure the safety of passengers and drivers by:

 

o Introducing advance safety technology features, including real-time location tracking via GPS, in-app emergency button connected to the police, telematics to ensure driving safety;

 

o Driver and passenger verification through technology like facial recognition;

 

o Offering a channel for the easy reporting of safety issues during or after a ride and providing 24/7 customer support;

 

o Providing accident insurance for drivers and passengers on every trip.

 

2) Setting high service standards for drivers, with safety as top priority:

 

o Conducting stringent background checks on drivers, including checking for criminal records, before they are allowed to provide the service;

 

o Putting in place a clear code of conduct for drivers;

 

o Putting drivers through road-safety training;

 

o Putting all private cars through necessary safety checks.

 

3) Service providers must be ready to deliver high service standards in order to operate on a national scale:

 

o The app and back-end technology systems must be stable and reliable at all times to deal with customer volume and any business expansion;

 

o There must be a sufficient supply of drivers to meet the demand of passengers at a national level;

 

o Service providers must provide in-app chat translation and have the app supported in different languages;

 

o Service providers must offer a variety of payment options, including cash, debit and credit cards;

 

4) Fair and equitable pricing driven by market forces to balance demand and supply

 

o Fares should be calculated on a dynamic pricing model which represents real-time demand and supply, and also considers externalities such as weather and traffic conditions;

 

o The fare must be displayed upfront so passengers can make an informed decision before accepting the ride;

 

o Pricing must balance the needs of drivers and passengers based on the free-market dynamics of demand and supply, thereby allowing drivers to earn sustainable incomes at fares that are reasonable and acceptable to passengers.

 

5) Setting basic requirements for service providers with plans to make them a critical part of Thailand’s future transport infrastructure.

 

o Must be a legally registered company in Thailand

 

o Majority of the shareholders in the company should be Thai

 

o Must pay local taxes

 

o Must have enough capital to support business operations such as ensuring drivers earn a sustainable income and expanding into every major city in Thailand.

 

“Ride-hailing is a crucial jigsaw to complete the public transportation ecosystem in Thailand. Looking from the lens of the larger benefits to the country, all players in the industry should stay open to this inevitable trend that has brought immense benefits to the economy and society.

 

“Ultimately, it’s consumers that matter the most, and all players should aim to stay relevant and adapt to the changing needs of today’s mobile users. More importantly, ride-hailing brings huge troves of data which were previously non-existent with traditional transportation modes.

 

“The potential of analysing this big data to solve traffic congestion issues, prevent safety incidents and develop smart mobility solutions yields immense rewards for the nation in the long term,” concluded Suthikorn.

 

Source: https://www.nationthailand.com/business/30376790

 

-- © Copyright The Nation Thailand 2019-09-26

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[Airalee]

I’ve never used the app myself, but a couple business owners have sent a grab car to pick me up and deliver me to their location.  The cars were more comfortable than most taxis and not much more expensive than the taxis here in BKK.  The drivers were definitely more “professional” than the average taxi driver.  However, since I live directly on Sukhumvit, it’s easier for me to just flag down a taxi.  If I lived more than a few hundred meters from Sukhumvit I would no doubt use one of the apps.

[sweatalot]

The standards demanded from the raid hailing services

must be a nightmare to taxies and song taew drivers, making them feel incapable to survive with that competition. 

 

[bronzedude]

This last summer I used the grab app when I was in Phnom Penh. It was always cheaper than a motorbike taxi. When it rained, it was good to be inside away from the downpour. I never had to wait more than a couple of minutes. But this is Thailand and taxi won't pick you up during busy traffic times which seem to be all day in Bangkok.  The taxi mafia rules here so any change is wishful thinking.

[sweatalot]

46 minutes ago, bronzedude said:

...  in Bangkok.  The taxi mafia rules here so any change is wishful thinking.

change is necessary and unavoidable

[wolf81]

15 hours ago, Airalee said:

I’ve never used the app myself, but a couple business owners have sent a grab car to pick me up and deliver me to their location.  The cars were more comfortable than most taxis and not much more expensive than the taxis here in BKK.  The drivers were definitely more “professional” than the average taxi driver.  However, since I live directly on Sukhumvit, it’s easier for me to just flag down a taxi.  If I lived more than a few hundred meters from Sukhumvit I would no doubt use one of the apps.

I've used Grab in Chiang Mai, to get from the main bus station to the airport. It might be a little bit more expensive than other options, but it's speedy and comfortable. And the thing I like the most: don't need to negotiate price. I hate doing that when dealing with taxi drivers or the red busses.

[Airalee]

34 minutes ago, wolf81 said:

I've used Grab in Chiang Mai, to get from the main bus station to the airport. It might be a little bit more expensive than other options, but it's speedy and comfortable. And the thing I like the most: don't need to negotiate price. I hate doing that when dealing with taxi drivers or the red busses.

Yeah...I used to live in CM.  The public transportation there is abysmal.  It’s no wonder that almost every article that I read where there are altercations between the taxi/tuk-tuk/songteaw drivers and Grab/Uber seem to come from that area.  

[Caldera]

For me the biggest benefit Grab brings from a foreign passenger's point of view is that it eliminates all kinds of taxi scams and helps bridge the language barrier.

 

Traveling in Vietnam and Cambodia 15 years ago could be a nightmare because of having to haggle with moto and taxi drivers (and, sometimes, still getting scammed). Even when you had an honest driver, most couldn't speak much English and many couldn't read a map, so getting from A to B could still be a challenge.

 

This year alone, I've had more than 100 Grab trips in both countries combined, and not a single negative experience. No scams, no "tours" and no confusion about my destination.

 

In Thailand, I think Grab already works well in many places, too. I don't use it much in Bangkok (yet?), because I've learned to navigate the "traditional" taxis, but in other places that previously had very limited options it definitely makes a difference already.

[timendres]

On 9/26/2019 at 8:11 PM, snoop1130 said:

Ride-hailing services contributed Bt21 billion to the Thai economy last year, a contribution that is expected to reach Bt120 billion by 2025

I don't understand the use of the word "contributed" here. It is simply a shift from one provider of transportation to another.

 

On 9/26/2019 at 8:11 PM, snoop1130 said:

The number of drivers providing services in this industry is also forecast to rise from 105,000 per month in 2018 to about 590,000 per month by 2025, which means more people will be given access to new income earning opportunities.

And, likewise, taking income from others.

 

The existence of these services does not create new customers (well, possibly incrementally). They merely shift the service from DLT taxis to other providers.

 

I am not against Grab. However, every single time I have used Grab here in Bangkok, the cost was 50% to 100% greater than the same ride in a taxi hailed on the street. Hence, I prefer taxis.