Business monthly April 06
 
EDITOR'S NOTE COVER STORY EXECUTIVE LIFE
VIEWPOINT IN PERSON SUBSCRIPTION FORM
IN BRIEF MARKET WATCH ADVERTISING RATES
IN DEPTH CORPORATE CLINIC
 

IN DEPTH
Yellow cabs take on black-and-whites Rising prices forcing many to forgo meat
E-signiture ready to sign Efforts continue to offload retail chains
Correction sends bourse into panic Bank of alexandria on the block

by amena bakr

after years of coughing, sputtering false starts, cairo’s ambitious capital taxi program is finally off the ground. during the first weeks since they hit the streets, the gleaming yellow capital taxi cabs – though still a relatively rare sight – have garnered considerable attention amid the capital’s hordes of black-and-white taxis.

the new cabs, available by phone, at designated pick-up points or simply by flagging down a passing vehicle, boast clean interiors, air conditioning and working meters – features that set them apart from cairo’s old, battered fleet of black-and-white taxis. moreover, the yellow cabs’ drivers have undergone training on how to deal with customers. most speak fluent english.

“one of the main objectives was to create a better image of the taxi... that gives egypt a more modernized and professional look,” says ahmed nabil, general manager of instant car rentals, better known as city cab, one of three companies spearheading the program.

the capital taxi program was drafted back in 2000, but was repeatedly delayed beyond its originally scheduled late-2004 launch date. one reason, says nabil, is the heavy capital outlay involved.
to break into the market, each bidding company had to come up with an initial £e 52 million to cover the cost of 500 fully-equipped late-model sedans, complete with dispatch equipment and paid licenses. of 43 companies that purchased the bid specifications for the 16 authorized operator slots, only three – city cab, cairo cab and cairo international taxi – actually placed bids, all of which were accepted.

nagui yassa, ceo of cairo radio cab & limousine, also known as cairo cab, suggests initial interest was low because few investors were willing to sink such heavy capital in an unproven market. the governorates involved stand to make much more from the £e 2,250 per-taxi fee if the program’s success stirs up more interest in the remaining slots.

the first phase of the capital taxi program began in mid-march with the three licensed companies rolling out their initial fleets of 50 cars each: hyundai elantras, volkswagen paratis, kia ceratos and chevrolet optras – all of which have won the requisite government approval. the raincoat-yellow vehicles congregate at 30 designated pickup points in cairo and giza, collecting passengers as they come. they can also be flagged down like regular cabs. wireless communication capabilities will be added in the coming months, allowing people to phone a call center that dispatches the nearest cab to pick them up.

during the second phase, slated to begin this summer, 200 cars will be added to each company’s fleet.
yet according to nabil, the public’s “very positive” early feedback has encouraged the three companies to push up the date. “with this kind of project you never know what’s going to happen next,” he says. “we end up changing our plan nearly every day... it all depends on the public’s response.”

for now, at least, the three companies are coordinating their strategies to a high degree in the effort to penetrate the market. they have no set areas of operation, and apart from separate pickup points, little sets them apart from one another. still, the potential for future tensions is obvious. “at this point, many people assume that the [yellow] cabs are just one company,” says yassa. “this puts our reputation in danger when [another] company doesn’t do its job well.” in the future, he expects that customers will develop a knowledge of the differences between the companies, and hail their rides from the one that provides the best service.

by year’s end, there may be as many as 1,500 yellow cabs cruising cairo for fares or responding to customers’ centrally-routed telephone calls for service. while the companies set up hotline facilities three months ago, both companies are waiting until they have enough vehicles to make dispatch service viable. “i want to provide customers with good service, so the hotline will only start working when we have 200 cars [in operation],” nabil says.

eager customers have been calling the companies’ regular office phone, and a few have even tracked down the managers’ private mobile numbers and attempted to place orders. the circumstances have prompted the companies to hasten plans to activate their hotlines.

as of press time, cairo cab was in the process of launching a dispatch service that allows its central office to contact drivers directly using a voice global packet radio service (gprs), thus allowing operators to direct the nearest taxi to a customer’s location. the company has also submitted a request for a global position system (gps) license, which would allow the tracking of vehicle positions on an electronic map, but, according to yassa, the government has said it will be difficult to require due to “security concerns.”

while the cost of the new taxi service may be a disadvantage – at least on shorter trips – the yellow cabs have considerable advantages over their black-and-white counterparts. for starters, their working digital meters – which produce receipts and will soon accept credit cards – will spare customers the annoyance of bickering with the driver about the fare. the companies also guarantee service in a late-model, air-conditioned car with a 1,600cc or larger engine and drivers who speak fluent english and are trained to treat customers with respect. that means the radio stays off, unless the customer requests otherwise.

capital taxi drivers are not permitted to ask people their destination before they enter the vehicle – a ploy black-and-white drivers use to suss out who will pay the most for a trip. they are also forbidden from taking on additional passengers once the vehicle is occupied – a rule monitored by sensors located under the car seats. if a new passenger enters the car while the meter is running, the sensor signals a microchip inside the meter that alerts the company of the violation. “this very advanced meter acts like a mini black box, giving us a daily report of the taxi’s activity,” explains nabil.

but nothing is more effective than the customer feedback, insists yassa. “if anything goes wrong, we are counting on the customer to defend his right and place a complaint with us so that we can solve the problem immediately.” all complaints will be handled appropriately, he says, adding that any driver caught misbehaving or underperforming will be fired.

the response, so far, has been overwhelmingly positive, insists yassa, who says the only real complaint has been the existing 150 cars is not enough to meet the high demand. “so far, 99 percent of customers are happy,” he says. “the remaining 1 percent are just upset when they don’t find cars available.”

the yellow cabs are expected to be a magnet not only to tourists – especially the more independent arab tourists who tend to patronize taxis – but also to safety-conscious egyptian customers. “i get a lot of calls from parents asking when the taxi will be available by phone so that they can have their children taken to school,” says nabil.

likewise, driving instructor hossam el din mostafa, 29, says he feels more secure about sending his wife out in a taxi with the knowledge that the company has a record of each driver and will hold them accountable for their conduct. “before, it was more risky for women to take cabs because they might get harassed. but now i feel it’s much safer,” he said.

yassa insists the new service is not a panacea for the capital’s transportation problems, nor will the yellow cabs entirely fill the role of the capital’s 80,000 black-and-whites. capital taxi’s primary role, he says, is to target tourists and middle or upper class egyptians seeking an alternative to the existing public transportation options. in other countries, he explains, “a taxi is known as a special service used by a limited number of people, not by the entire population like we have here... we are working to change people’s understanding of the taxi.”

the program is expected to create 5,100 jobs by the end of the year. for the first time, women will see the inside of taxis from behind the wheel; the companies plan to hire women to pilot a third of the vehicles in their fleets. “i believe that female drivers will make more women passengers feel safe on their trips,” says nabil.

previous government attempts to initiate a phone-in taxi service have been unsuccessful. in 1986, a project implemented by the general syndicate for land transportation and the general traffic administration involved taxis lined up at major traffic points, where nearby telephone booths had been set up for drivers to receive calls from customers. the project lasted only 14 months, falling victim to a lack of public awareness and rampant theft of the phones.

the project suffered from the widespread perception that it was exclusively an upper-class affair. this time around, organizers are stressing that the taxis are meant for a market wider than just the elite. “we’ve made the taxis drive through the streets so the public feels that they are part of their daily lives, not just a service for tourists,” nabil says.

other initiatives similar to the capital taxi program are already under way, and appear to be succeeding. a private company called fast touristic transport, better known as fast call, launched a call-in limousine service in alexandria on february 28. although the company runs only 35 vehicles at rates about 10 percent higher than standard taxi fares, its operations manager, islam kassem, says the project has proven very successful. “people are always on the lookout for a good service. that’s why we are thinking of expanding in the coming months,” he told business monthly, adding that the company plans to double its fleet in the coming months to keep up with demand.

another service, cairo blue cab, has been providing call-in limousine service in cairo for the past two years. unlike the yellow capital taxi vehicles, blue cab’s 10 sedans, which run about 30 percent more than the standard fares on short trips, aim to be inconspicuous, a plus for customers who wish to keep a low profile. blue cab employees were unavailable for comment at press time.

nabil believes the three companies participating in the capital taxi program will succeed because their service fills a lucrative niche in the market. “our service is one of a kind, and this is encouraging us to expand and increase our investment,” he says.

not surprisingly, stalwarts of the traditional black-and-white cabs are scoffing. “in egypt all the customer cares about is price: the cheaper the better. so this whole capital taxi project will meet its doom very soon,” predicts ahmed zaher, 48, the driver of a venerable fiat 128 black-and-white cab.

yet a few drivers seem alarmed by the new competition. “these capital taxi cabs are stealing away the customers that pay us best, like tourists,”complains driver zaki abdel aziz. “but i don’t think they’ll have any effect on the majority of our customers who can’t afford their prices.”

 

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