Follow that cab!

The recent public tender of a company licence for 200 taxis has attracted interest from local political heavyweights and prominent businessmen to a transport-cum-property conglomerate to a state-owned firm, a review of the bidders reveals  

There’s little wonder a taxi licence in Macau can fetch as much as a high-end residential unit given the severely undersupplied number of cabs in the gaming enclave – just 1,600 taxis serve a population of 663,400 and annual visitor arrivals exceeding 32 million. 

Eying these business opportunities, five companies respectively limked to a Chinese state-owned company, a transport-to-property conglomerate, political heavyweights and businessmen are now vying for a licence to operate 200 additional ‘special taxis’- albeit the current operator is still in the red despite running the service for nearly two years. 

The Transport Bureau opened a public tender in October for a company licence to operate 200 ‘special taxis’ – which can only be hailed by telephone, via website or mobile application – for an eight-year tenure. These new taxis will join the existing 100 ‘special taxis’ operated by Macau Radio Taxi Services Ltd. since April 2017, and individually run ‘black taxis’ which can be hailed in the street. 

The Bureau said it has accepted bids from five companies for the 200 taxis – namely, existing operator Macau Radio Taxi, City Taxi On Call Company Ltd., Macau New Era Taxi Ltd., Vang Iek Radio-Taxi Company Ltd., and Fai Tat Taxi Services Ltd. These new taxis have to be either hybrids or other environmentally friendly vehicles able to accommodate at least six passengers. 

The Bureau also revealed that the result of the public tender would be announced in the first quarter of 2019, after judging bidders’ operational and management plans for the service, rates, past experience and other factors. It is expected that the winning company will put the first 100 taxis into service in the third quarter of 2019, while the remaining 100 will be gradually introduced within a year of launch of the service. 

Still in the red 

Company records show that the existing operator, Macau Radio Taxi, is backed by local travel industry figure Cheong Chi Man and Golden Dragon Group Co. Ltd. The group, which runs several hotels and casinos here, is headed by prominent local businessman and Executive Council member Chan Meng Kam, who is also a leader of the Fujian community here. 

Macau Radio Taxi requested the government allocate more ‘special taxis’ since coming into service nearly two years ago. According to General Manager Kevin U Kin Lung it now loses about MOP100,000 a month given the high expenditure it incurs and limited income. 

“We have invested a lot in hiring staff to take calls for taxis and optimising the mobile application [of the service],” he explained, “but we cannot have more taxis operating to enhance the income.” 

       300 

       No. of ‘special taxis’ to be available in the city following the recent public tender 

The GM believes that only by getting the right to run the 200 new taxis can the company hope to break even, while the success rate of customers hailing the company’s taxis could increase to 90 per cent from the current level of 35 per cent. 

“If the new licence is won by a new operator it is expected that there will be competition for drivers, thus increasing the operating costs [of both],” he added, although hopeful that the authorities would award the company the new licence due to its past track record and experience. 

Coming back 

Macau Radio Taxi is not the only company of the five bidders that has past experience in supplying a taxi service in the enclave. Vang Iek Radio-Taxi solely operated ‘special taxis’ in the city for 25 years until 2014, when it exited the market after being criticised for many years for delivering substandard service with a scanty supply of taxis. 

The company returns to bid for the licence after teaming up with local transport-to-property conglomerate Shun Tak Holdings Ltd. founded by local gaming magnate Stanley Ho Hung Sun. Van Iek company records show a company linked to Shun Tak – Sky Charm Passenger Transportation Ltd. – acquired a majority share of the taxi company in 2018, with Maisy Ho Chiu Ha serving as chairman. Ms. Ho is the Executive Director of Shun Tak and younger sister of Pansy Ho Chiu King, who is Executive Chairman and Managing Director of Shun Tak and Co-chairman and Executive Director of local gaming operator MGM China Holdings Ltd.  

“If the new licence is won by a new operator it is expected that there will be competition for drivers, thus increasing the operating costs [of both],” said Kelvin U, General Manager of Macau Radio Taxi Services Ltd. 

Eugenio Cheng Wing Chiu, General Manager of Vang Iek, believes that joining hands with Shun Tak could create synergy. 

“Vang Iek has experience in operating taxis while Shun Tak has experience in running local transportation and tourism services,” he said. “These could bring new ideas to the taxi business model for a better service.” 

Shun Tak is one of the ferry operators linking Macau to Hong Kong, and has also recently involved itself in the shuttle bus service plying the two cities via the newly opened Hong Kong-Zhuhai-Macau Bridge. 

Mr. Cheng added that the company had decided to bid for the ‘special taxi’ service again as it sees a different market landscape vis-a-vis a few years ago. Before ceasing operation in 2014 Vang Iek had cited the shortage of drivers as one of the reasons for its unsatisfactory service. 

“[Partnering Shun Tak] could bring new ideas to the taxi business model for better service,” said Eugenio Cheng, General Manager of Vang Iek Radio-Taxi Company Ltd. 

According to government figures the number of vacancies for drivers and similar positions for land transportation, including taxis, buses, coaches and trucks, stood at 157 mid-2018, with monthly earnings averaging MOP23,790. 

The Mas 

Partnering local company Sun Fu Lon Group, Mainland Chinese companies Tus-Holdings Co. Ltd. and Shouqi Limousine & Chauffeur, Fai Tat Taxi is also bidding for the 200 new taxis. Sun Fu Lon Group, which engages in property management, trading, cleaning, finance and others, is headed by Wong Kin Chong, president of the Industry and Commerce Association of Macau Northern District. 

One of the board members of Tus-Holdings Co. Ltd., which offers technology-related services and products, is Ma Chi Kong, grandson of late prominent local tycoon Ma Man Kei; while Shouqi is a major car-hailing player on the Mainland. 

“It’s always been difficult for residents and travellers to catch taxis here, especially in the neighbourhood areas,” said Mr. Wong. “So we hope to replicate the successful online car-hailing model of the Mainland market in Macau in order to enhance the local taxi service.” 

He added that their service could benefit the Macau market as Shouqi is a seasoned car-hailing player on the Mainland market, racking up as many as 600,000 daily rides a day across 70 Mainland cities. 

“The online car-hailing model is still developing in Macau, which could be spurred by the Mainland experience,” he believes. 

State-owned 

Macau New Era – also bidding for the new ‘special taxi’ licence – is linked to Nam Kwong (Group) Co. Ltd., a Chinese state-owned company in the city that has an extensive local business portfolio including transport, travel agencies, hotels, energy, property, logistics, finance, conventions and exhibitions, logistics, food wholesale and retail, and other interests, company records reveal. One of the two bus operators in the city, Sociedade de Transportes Colectivos de Macau (TCM), is a subsidiary of Nam Kwong. 

City Taxi On Call, the last of the five bidders, is linked to local firm Multinational Holdings Group Ltd. and a Mainland enterprise, according to company records. Multinational Holdings, which runs property to tourism businesses in Macau and the Mainland, is headed by Alex Lao Nga Wong, president of the Macau Travel Agency Association and a local deputy of China’s top political advisory body, the Chinese People’s Political Consultative Conference. 


One-fifth hike 

The number of taxis is expected to increase by 18.75 per cent from the current figure of about 1,600 once all the new taxis hit the city’s roads. 

In addition to a new company licence for 200 ‘special taxis’ expected to gradually come online in the third quarter of 2019, the Transport Bureau launched a tender in March for 100 new licences for individually run ‘black taxis’ that can be hailed in the street. 

Attracting over 1,000 bids, the 100 new ‘black taxi’ eight-year licences fetched between MOP810,101 and MOP988,080. This new fleet of taxis, which can only be electrical vehicles for environmentally friendly reasons, gradually started operating in November. Besides the electrical taxis, there were only about 215 electrical vehicles in the city as of last September, government data show. 

 

 

 

 

 

 

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