Fast and furious business
The weekend’s battle between rival motorcycle taxi gangs reveals the fiercely competitive nature of the motorbike taxi business. Motorbike riders not only have to struggle through Bangkok’s heavy traffic, but they also have to protect their business turf.
Last weekend, “Udomsuk 1” and “Udomsuk Rungruang” motorcycle taxi camps fought over their overlapping routes. The conflict ended with the tragic death of an innocent young courier.
The scene was captured on video and the legal process is underway. However, if the issues related to the motorbike taxi business are not addressed, this will not be the end of the violence.
“Which vest brand is more expensive than Hermes?” was a joke circulating on social media after the incident. It implies that the orange vest that motorbike taxi riders wear, as a license for them to operate, can be more expensive than luxury brands.
It was reported that a motorcycle taxi rider may have to pay as much as Bt800,000 to get a license to offer service in busy business districts, such as Asoke and Chatuchak.
The cost of the orange vest varies according to location. Motorbike riders in small alleys reportedly pay only Bt30,000-Bt50,000.
Riders without enough money to make the upfront payment will pay a monthly fee. For example, on Sukhumvit Road, where the violence took place, a motorbike taxi driver has to pay as much as Bt3,500 per month to get a license from the person who controls the motorcycle taxi station, according to Chalerm Changthongmadun, president of Thailand’s motorcycle taxi club.
There is no single concession to run all motorcycle taxi stations in Thailand. An investor planning to set up a motorcycle taxi station is required to present a title deed for the land where the station will be located and submit an approval from the land owner to the district office to get an approval.
The approval process can be long because the authorities have to check the availability of the designated spot and the number of existing motorbike taxi riders there. Conflicts can occur when illegal taxi riders are competing in the same routes, said Chalerm.
Moreover, motorcycle taxi riders are facing stiff competition from online courier applications, such as Grab and Lalamove, which can offer a service with more precision by using a tracking device.
According to Chalerm, there are 88,578 registered motorcycle taxi drivers in Bangkok who are located at 5,513 motorcycle taxi stations. There are more than 130,000 registered motorbike taxi drivers nationwide. The actual number of motorbike taxi riders on the road is higher because there are many unofficial riders.
In spite of their essential role in helping commuters, motorbike taxi riders are burdened with high debts and costs of living. Most of have them left their hometowns to work in the city.
In fact, they can be a strong political force and their political role has not gone unnoticed. Most of them are supporters of Thaksin Shinawatra, thanks to Thaksin’s policy to revamp the motorbike taxi business when he was the premier.
Regardless of the efforts to sort out the motorbike taxi service system, irregularities in the business persist, as seen by the eruption of conflicts from time to time.
The University of Thai Chambers of Commerce in March surveyed 1,243 motorcycle taxi riders and found that they have an average income of Bt974.81 per day, or Bt24,370 per month. However, around half of their income, or Bt11,633, went to the orange vest fee. They had Bt12,736.61 left to spend in an average month.
They usually work 25 days a month, make 41 trips a day and work at least nine hours a day on average.
The survey also showed that 69.40% of them were burdened with debts of around Bt185,000 and they had to spend Bt5,266.30 to pay off their debts each month. Many sought loans to buy a motorcycle, worth around Bt61,817, for their business.
Earlier this year, the state-owned Thai Credit Guarantee Corporation (TCG) initiated a loan program to help motorbike taxi riders. TCG offers credit guarantees to discourage them from seeking loans from loan sharks.
The TCG works with state-owned and commercial banks to provide loans, with the banks offering the loans and the TCG providing the loan guarantees.
It remains to be seen whether this financial assistance program will help improve the well-being of these motorbike taxi riders. Financial assistance may not be the only answer. Motorbike taxi drivers will have to adjust as customers now have more choices. As the UTCC survey also revealed, motorcycle taxi riders, who managed to apply an online application to their business, can earn an extra Bt1,741.95 per month.