Thursday, December 11, 2014

Taxi fares priced to the limits

The last time I was in a cab was more than a year ago. For me it is either my car or public transport. These days more buses than the unreliable MRT. Cabs are simply not value for money. I don't know if I am right but overall owning your own set of wheels is better than calling cabs.

The story above confirmed my hunch that the cab companies have used their pricing power to the limit. Before this happened at Changi Airport I didn't understand why Trans Cab wanted to list but now their effort to is probably history.

On the other hand taxi drivers need to earn enough money to continue to attract locals to drive them or you would have many taxis in the yard and no drivers. We have a top and bottom squeeze here. I wonder if this is not the reason why we cannot imitate HK taxi scene.

For me, I am waiting the day of the driverless car come asap. Of course "all things being equal" transport cost will go down but property price will go up. This is the peculiar dynamics for the layman concerning the non tradeable sector of the economy. Indeed property continues to be a good long term investment despite what some very learned socialist minded economist eruditely propose otherwise.

The only enemy beside a bad economy or adverse politics for a good property market is the disruptive side effect of technology. Ecommerce has started to hurt on the street retail and it is not stopping there. Quietly years before it had save office rent through hot desking. The long term sweet spot in real estate is probably residential, logistics and meeting places.

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