12:00 AM, April 14, 2014 / LAST MODIFIED: 01:53 AM, March 08, 2015

Make taxi fare attractive

Make taxi fare attractive

Ridwan Quaium

One may think that since there isn't any quality public transport or quality para-transit available in Dhaka, people will still use the new yellow taxi cab, even though the fare has been set at an extremely high rate, due to inelastic demand -- which means that demand of a product or service is not sensitive to the price. However, this may not be the case because the rate is set so high that, considering the purchasing power of the residents of Dhaka, majority of the people may not be able to afford it even though it is supposed to be much safer and more reliable.
One may also think that the service is aimed at the affluent of the society, but they already have personal vehicles. Therefore, the taxi service may not attract them also.  Most people may use the taxi service only during the day when they really do not have any other option or late at night when they need security. For most people of the society taxi service is an elastic demand, meaning that they will use the service more if the fare decreases and use the service less if it increases. As of now, the taxi fare is even higher than the taxi fare in Bangkok, though the purchasing power of the people in Bangkok is much higher than the purchasing power of the people in Dhaka.
To make the service affordable and acceptable to the public it is important that the taxi fare be set considering the purchasing power of the residents of the city, and after comparing with the taxi fares of other cities in the region. There is no question that Dhaka lacks a quality public transport and quality para-transit, and resetting the taxi fare for the new yellow cabs so that it is affordable to the majority of the residents will certainly give the city residents a quality option to commute within the city.

The writer is a Transport Engineer.


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