Tom Pepinsky

Category: Malaysia

  • The Economics of Taxis

    One difference between life in Malaysia one year ago and life in Malaysia today is with regards to taxis.  Since we’ve arrived, we’ve noticed a big change in negotiations with taxi drivers.  It used to be that in Kuala Lumpur, if you flagged down a cab, the driver would *almost* always take you where you wanted to go, and use the meter.  There was an exception for the really touristy area of KL known as Bukit Bintang or in front of the Petronas Towers, but besides that, the driver would take you and use the meter, no questions asked.

    That is not the case now.  Now, almost everywhere that we go after around 3PM or with the exception of when we get cabs actually at our hotel, taxi drivers refuse to use their meters.  Instead, they insist on negotiating some absurd price–often about four or five times the metered fare–for the trip.  This is a real problem.  You can often negotiate the price down to about twice the metered fare, but besides that, the drivers refuse to budge.

    We cannot figure this one out.  In essence, this has produced an annoying feature of KL life that all over the city, their are cab drivers sitting around with no passengers, just hanging out at taxi stands and refusing to take people who don’t pay inflated prices.  The reason that this doesn’t make sense is that they are not making any money by just sitting around.  Taxis in KL operate on concessionary bases, like in New York, where they have to pay a fee for the right to use the cab and then they make any take-home pay after that cost.  So by sitting around at taxi stands and refusing to take passengers, or driving around, pulling over, and then refusing to pick you up, they are shooting themselves in the foot. 

    There are two things that explain why there could be a difference between now and a year ago.  (1) Government-mandated gasoline prices have risen, but government-mandated metered taxi fares have not.  (2) Downtown KL is experiencing a construction boom that creates more traffic.  But neither of these can explain why cabbies would be willing to forgo all income by offering absurd prices that price passengers out of the market.  Remember, KL does have pretty good mass transit, so people have options even if they would prefer to take a taxi.  And we know that the market isn’t clearing because there is a surplus
    of cab drivers waiting around and doing nothing as well as a surplus of
    passengers complaining that cabs are too expensive and therefore taking
    the subway even though they would prefer to take a cab.  Furthermore, Indonesia and Singapore have experienced the same construction booms, gas price rises, and steady taxi prices, yet in both countries, taxi drivers will pick you up and use the meter, no problem.

    Any Malaysian readers who can explain this to us?

  • "Want to go for a beer and watch football?"

    In the past 24 hours, three Malays have invited us out for drinks.  And I’m not talking soda or tea, I’m talking going out for a beer.  It can be difficult to square this with the fact that all three were also observant Muslims unless you understand how many Southeast Asian Muslims approach their faith.  For many, Islamic rules such as those that forbid the consumption of alcohol are very personal affairs, not something that has to be legislated or that can be mandated by a religious ruling.  Two of the people I was speaking to used the phrase "this decision is between me and God," and apparently, God is much more concerned with other things.

    Of course, there is a tension here.  Many Malays are much more observant of rules such as those that prohibit the consumption of alcohol.  This is something that causes a bit of uncertainty within the Muslim community.  There exist bodies such as the Federal Territories Department of Islamic Affairs (known by its initials, Jawi) that go around trying to police the behavior of Muslims.  On occasion they have "arrested" Malays found to be drinking or dressing inappropriately at nightclubs.  On other occasions, they have detained Malay teenagers for sitting to close to each other at the mall.  But most urban Malays oppose Jawi’s interference in daily affairs of Malays, and in fact, the federal government has clamped down on Jawi for overstepping its boundaries as of late.

    At any rate, it’s just interesting to see how this tension plays out in real life.  Malaysian Islam is in general so moderate that it’s tough, when you get past the fact that there’s no pork in non-Chinese restaurants and that women wear headscarves, to remember that you’re actually in a majority-Muslim country.  Then you get the experience of Middle Eastern Muslims who visit Malaysia as tourists.  (This is apparently vacation time in the Middle East, as we mentioned about this time last year.)  One guy I was talking to today kept bringing up how different Middle Easterners were from Malays, using terms like "impolite" and kurang ajar (literally, "insufficiently taught") to describe their behavior.  For Americans (and we were two of them), for whom Islam is represented in the media essentially as a Middle Eastern phenomenon, the fact that there is so much variation within the Muslim world can be difficult to grasp.  Then you travel to Southeast Asia, and it becomes so clear.