Macau Matters | Fixing Macau’s Broken Taxi System

Richard Whitfield

There is ample evidence that the government managed and regulated system of taxi services in Macau is totally broken. A cursory analysis leads me to believe that a major overhaul is needed, and this article summarizes my thinking on what should be done. Admittedly, my analysis is cursory (and I would be very happy to do a much more in-depth study if somebody is willing to pay me to do it!).

I recommend that they change the system to regulate drivers and not taxis. The current system whereby the government sells high-priced taxi licenses to investors who then hire drivers introduces a totally unnecessary middle-man who skims off much of the system’s profits.

I further recommend that they replace the antiquated taxi metering and radio dispatch systems with a modern Uber-like system for calling taxis, determining distance traveled, calculating fares and accepting payments, and reviewing the performance of both drivers and customers. But this electronic taxi management system should be run as a public monopoly, rather than as a private business like Uber. This would also cut out another useless middle-man that also skims profits from the system – the taxi management companies.

I also recommend removing the system of regulated, fixed fares – with modern technology it is quite feasible for customers and drivers to negotiate a price for each ride using an auction style system which would automatically increase fares during peak periods while reducing them at off-peak times.

And finally, we need to get rid of these silly laws about not taking photos/videos/audio recordings of taxi drivers. Drivers should accept that they may be recorded as part of their licensing, because they are important for proving cases of inappropriate driver behavior. (Passengers should also accept that they may be recorded as part of the conditions of riding in a taxi – so that bad passenger behavior can also be recorded.)

In my proposed taxi services system, a small government monopoly would manage the computer systems underpinning taxi services for a small, regulated profit. This system would be mobile phone App and cloud-based and not require any specialized technology (no taxi meters, radio calls, etc). Drivers would be required to undergo extensive training and good character checks before being licensed to driver passengers and would be required to have liability insurance (like doctors). Their performance would be periodically reviewed to maintain their license, and passenger reviews would be an important part of their assessment. Drivers would be able to use any vehicle as long as it met minimum safety requirements, which would be monitored by the regular inspections.

The existing taxi radio dispatch companies would no longer be needed – and good riddance because they currently provide very poor service. It has been years since I could get an answer from the taxi phone numbers, let alone have them get a taxi to my location. The taxi license owners would also be eliminated. All they have ever done is take a substantial part of drivers’ income without adding any value to the system. Finally, “bad apple” drivers would be quickly eliminated by bad passenger reviews and recordings of their bad behavior.

The existing industry players – radio dispatch companies, taxi owners and “bad apple” drivers have created the taxi system mess we have now and deserve no sympathy or support. Uber has proven that a much better system is possible and that the technology already exists. What is stopping Macau from leading the world in developing and regulating a “next generation” system for providing public taxi services? The only thing that seems to be holding us back is a government with no vision that is timidly unable to stand up to a few undeserving bad actors in the existing system.