Taxis take on tuk tuks in capital

Photo by: Daniel Goodman

Global Taxi launched in 2008 and is operating in the black, despite expanding at a slower rate than planned.

via CAAI

Sunday, 09 January 2011 20:40 Daniel Goodman

Tuk tuks, motos and unmarked taxis remain the dominant mode of transportation around Phnom Penh, but metered taxis are slowly gaining ground on the capital’s roads, according to Global Taxi’s Chief Executive Officer Andre Lim.

Global Taxi was started in July 2008 with a US$1 million investment from Chinese businessman Hu Guangxi, through his company Global Cambodia Trade Development Co Ltd, according to a report from Xinhua news agency.

“In the beginning there was some difficulty because customers had no habit of taking taxis.

“But now, almost three years later, I think the business is growing strongly,” Andre Lim told The Post.

Entering a “highly competitive” market has been a challenge.

Originally, the company predicted that within three or four months of its launch it would expand its fleet from 12 to 60 taxis, but growth has been slower than hoped.

Three years after opening the company now boasts a fleet of 40 cars, conducting about 800 to 1,000 journeys per day – a number the company hopes to double over the next two years. Of its customers, about 25 percent are foreigners.

While revenues and profits remain smaller than originally expected, the company has been in the black since its second year of operation and Andre Lim remains confident about the potential of metered cabs.

“I think in the long-term, there is a lot of potential for the taxis here,” he said.

Since its launch the sector has developed, with a second metered taxi company, backed by Korean investment, entering the market last year.

Some tuk tuk drivers are concerned about the new competition from taxis.

Ros Socheth, a 24-year-old moto and tuk tuk driver, originally from Prey Veng province, said he thinks taxis are the future for Phnom Penh.

“The government wants to make Phnom Penh grow as a city and build more roads.

“As the city expands I think the taxis will become more popular and have more power,” he explained.

Operating in a developing market with high fuel prices has also led Global Taxi to carefully evaluate its business strategy.

Its taxis will generally stay parked in one spot to wait for calls, as opposed to driving around looking for customers as is common in other more developed markets.