Taxis call for fare rivalry
Germany gets tough on Chinese takeovers
THE operator of the capital’s biggest metered taxi fleet has called on Phnom Penh municipal officials to crack down on unlicensed taxi operators, claiming as many as half of the capital’s 1,100 metered cabs are operating illegally.
Din Radeth, human resources manager for Choice Taxi, which operates a fleet of over 200 sedans under a licence from City Hall, said companies that invest in legal operations are facing cutthroat competition from unlicensed operators, who benefit from the uneven playing field.
He said metered taxi fleet operators are required to register with City Hall and pay a $2,000 monthly licensing fee to the municipality. Yet he claimed only three of the eight metered taxi firms have registered, and the unlicensed firms are benefitting from a poor regulatory framework that that creates major disadvantages for compliant firms.
“Illegal companies don’t pay this fee and some even have their drivers pay the company to receive taxi licences, even though the company does not have the right to issue ta xi licences in the first place,” he said.
“This is a problem for the reputation of legal taxis and there has been no action from the government.”
Radeth said the lack of oversight creates a powerful incentive for taxi fleets to operate without a licence or any accountability.
“We often hear of passengers who have problems with illegal taxis and we don’t know if these companies pay for passenger and car insurance,” he said. “For legal companies, the company covers the cost of insurance.”
Radeth explained City Hall’s licences grant companies the right to operate taxis with meters, and do not apply to those companies that operate taxis with a fixed or negotiationbased fare.
“If illegal taxis remove their meters, this would make them legal,” he said.
Choice Taxi launched operations in 2009. According to Radeth, unfair competition from unregulated metered taxis almost drove the company into bankruptcy. While it has recovered, the taxi fleet operator continues to suffer financially, he said.
He also expressed frustration at seeing these unlicensed taxi fleet operators poach the company’s drivers. He said nearly a third of his drivers now work at unlicensed taxi companies, arguing that these rival firms can afford to offer higher salaries given their lower operating costs.
“In the end, we have grown the crops but others got the harvest because we also lose our experienced drivers to non-licensed taxi firms and now face a shortage of drivers within the company.”
Reached yesterday, City Hall spokesperson Mean Chanyda, said just three companies had received licences to operate metered taxi fleets in Phnom Penh, namely Choice Taxi, Airport Taxi and Great Wall Taxi.
“The government approved licences for only three taxi companies for legal business operation,” he said.
“The rest are still not in compliance with the procedures of City Hall and we have reached out to them, but we still haven’t received an answer.”
He promised, however, that city officials would take action soon.
According to Chanyda, metered taxi fleet operators are required to submit an application to Phnom Penh municipality and secure approval from the Council of Ministers.
Taxi Rouge, a taxi fleet operator that was not on City Hall’s list, insisted that it was licensed to operate in the capital. General manager Kong Sarath said the Ministry of Transportation and the Ministry of Interior were involved in the taxi registration process, but could not confirm which agency had actually given the company its approval.
He agreed that taxi fleets operating without a licence were creating unfair competition, and called on authorities to take action.
“The government is working slowly on this issue but City Hall is not taking enough action,” he said. “We are not happy with this situation of illegal taxis as it affects our marketing and the current governor does not take action.”
Officials from the Ministry of Transportation and Ministr y of Interior could not be reached for comment yesterday. ALARMED by a raft of Chinese takeovers, Germany is putting the brakes on the Asian giant’s shopping spree as it sends out the message that not everything is for sale – at the risk of antagonising Beijing.
The more assertive noises coming out of Berlin are likely to dominate Economy Minister Sigmar Gabriel’s trip to China in the coming days, putting to the test the oft-vaunted “special relationship” between the top export powers.
Germans have watched with unease as Chinese enterprises have swallowed up a record number of homegrown tech companies this year, sparking fears of German knowhow and intellectual property being sold off to the highest bidder.
The wave of acquisitions has also stoked grumbles over China’s easy access to the country’s open markets, often through state-backed companies, while foreign investors there face tight restrictions.
“Germans seem to be growing more and more sceptical about China, and consequently more willing to pursue a tougher approach to Beijing,” said analyst Hans Kundnani from the German Marshall Fund.
In the clearest sign yet that Berlin could be squaring up for a battle, the German Economy Ministry this week said it was taking a closer look at two planned Chinese takeovers – effectively stalling both deals.
The moves have not gone unnoticed in Beijing and Gabriel will likely face some prickly questions when he leads a 60-strong business delegation on a five-day trip to China and Hong Kong from Tuesday.
Germany’s first punch came last Monday when the ministry said it had withdrawn its approval for Grand Chip Investment’s 670 million ($730 million) purchase of chip equipment maker Aixtron, citing security concerns.
German daily Handelsblatt said that the surprise reversal came after US intelligence services warned that Aixtron products could be used for military purposes.
The deal is now back under review, a process that could last three months.
Days later, the Economy Ministry said it was also reviewing the mooted sale of German firm Osram’s general lighting unit to a Chinese buyer.
So far there has been little official reaction from Beijing.
But a bylined commentary carried by the official Xinhua news agency was scathing, accusing Germany of “protectionist moves” that called into question “Berlin’s sincerity in securing an open and transparent investment climate”.
Close economic ties
“It is time for Berlin to let go of its delusional ‘China threat’ paranoia,” it added.
Chinese firms spent over 11 billion on German companies between January and October, a new record, according to accountancy firm EY.
Included in that is the 4.6billion purchase of leading robot maker Kuka by Chinese appliance giant Midea, a deal that sparked particular alarm and which Gabriel had sought to thwart.
Crucially there has been no word yet on whether Chancellor Angela Merkel – who has championed close economic ties with Beijing – approves of the idea.
The British government delayed the controversial Hinkley Point nuclear project over concerns about China’s involvement, before eventually giving it the go-ahead.