p/e=8 only, page-14

Hi ABCGuy, after mulling over this for a while, I am not convinced that the new regime will necessarily increase CAB's revenue or the industry's overall revenue.

Corporate taxi spend is a very minor part of the budget. They are quite likely not making any decisions based on price, but rather on service/operational/support/security factors.

As for consumers, how many cards can you tolerate in your wallet? The nature of the payment industry is to gravitate towards one. Just examine what happened with the Octopus Transit card in HK. The industry that held out the longest against adopting the card is- you guessed it, the taxi industry, which relented last year, over a decade and a half since the smartcard was introduced. Octopus is now ubiquitous, and "toot" has now entered vernacular slang to mean paying by Octopus smartcard (mimicking the sound of the terminal confirming payment). The same thing is happening in Singapore, and to a lesser extent, in Tokyo (Suica card).

ETicket is very unlikely to be a major player, as they could not gain critical mass of users to attract other players to join the payment network. I would see Opal would be the future in NSW, and one day, Opal will probably be ubiquitous just like Octopus.

So all in all, I am not convinced that the price adjustment will lead to a significant increase in CAB's revenue, either from organic growth (the main driver of activity is still economic factors, rather than price), or from taking market share away from cash.