Last updated: 07:58 / Friday, 29 August 2014
By Matthews Asia

"Taxi Mafia" in Thailand

"Taxi Mafia" in Thailand

I recently returned from two eye-opening weeks in southern Thailand to visit an American friend who had been living there. The beauty of the islands and the friendliness and hospitality of the Thai people made for a wonderful first experience in Asia.

I had already been planning to make this trip to see my friend when the country’s military seized control of the country in a coup in May. My friend assured me I should go ahead with my plans since she still felt completely safe—aside from the occasional electrical brown-outs. In fact, the coup was actually helping tourism in some ways, particularly with the regulation of Thailand’s taxi system.

Signs posted in airports and hotels warn visitors to take metered taxis only, and offer phone numbers for placing complaints should a taxi driver try to overcharge you. All of this is well and good, but once visitors leave the airport or hotel, virtually no metered taxis can be found. In Thailand, where haggling is a way of life for those in the tourism industry, everything from tailored suits to trinkets can be bargained down to surprisingly low prices. But private taxis, or gypsy cabs, (often controlled by crime groups informally known as the “taxi mafia”) tend to be an exception to the bargaining. And, unfortunately, metered taxis in Bangkok and Thailand’s southern islands are few and far between.

This leaves tourists to pay much higher rates for transportation. For example, I took a metered taxi from my hotel in Bangkok to the backpacker mecca of Khoa San Road to do some souvenir shopping. The fifteen-minute, roughly 4.5 kilometer ride cost me 45 baht (~US$1.50). For my return, however, I had to go to a stand (purportedly for taxis), and ask an attendant to help me get a ride back to the hotel. While many attendants did not seem willing to haggle, I managed to talk down one attendant from a 600-baht (approximately US$19) fare to 250 baht (~US$8)—better, but still almost six times the amount the metered taxi had cost me for the same distance. The attendant told the driver where to take me and told me how much to pay the driver, and then the driver handed the attendant what appeared to be his share of the fee (about 20 baht).

Both prices were cheap compared to what I’m used to paying in the U.S. and I could certainly afford both fares, but getting “taken for a ride” in more than one way did not sit well with me, nor does it for most of the other travelers and foreigners living in Thailand I spoke to about this issue.

During our stay in the resort city of Phuket, we were never able to find metered taxis once we left the airport. Even our hotel couldn’t help us. To put the high cost of taxis into perspective, a one-night stay at our beautiful four star hotel in Karon Beach cost us just 500 baht (roughly US$15). When my friend and I went to Patong Beach, a 10-minute drive away, the round trip cost—by private taxi going there and a tuk-tuk on the way back—was 800 baht (US$25).

Most of these drivers are actually legal metered taxi drivers, however, I was told that they are so worried about the backlash from the "taxi mafia" that they go along with the informal system.

In early August, the Thai military issued a threat to police officers that do not protect metered drivers from the taxi mafias and demanded that they track down and arrest the leaders of these operations. The military has also promised legal drivers protection from any retribution. 

Locals told me that since the coup, there appear to be more efforts to tame this practice of gypsy cabs. Ex-pats living in Thailand told me that they have recently seen an increase in metered taxis, and are hopeful that the military’s intervention will improve fares and the country’s overall taxi system. 

By Jessica Feller, Online Marketing Coordinator; Matthews Asia

The views and information discussed represent opinion and an assessment of market conditions at a specific point in time that are subject to change.  It should not be relied upon as a recommendation to buy and sell particular securities or markets in general. The subject matter contained herein has been derived from several sources believed to be reliable and accurate at the time of compilation. Matthews International Capital Management, LLC does not accept any liability for losses either direct or consequential caused by the use of this information. Investing in international and emerging markets may involve additional risks, such as social and political instability, market illiquid­ity, exchange-rate fluctuations, a high level of volatility and limited regulation. In addition, single-country funds may be subject to a higher degree of market risk than diversified funds because of concentration in a specific geographic location. Investing in small- and mid-size companies is more risky than investing in large companies, as they may be more volatile and less liquid than large companies. This document has not been reviewed or approved by any regulatory body.

About Jessica Feller

Jessica Feller is Online Marketing Coordinator at Matthews Asia. As a member of the digital marketing team, she manages website content, email marketing campaigns and Matthews' social media strategy, as well as supports Matthews' online advertising efforts.Jessica joined Matthews Asia in 2011.