Fast lane turns slow for luxury cabs

Fast lane turns slow for luxury cabs
Sector dependent on arrival of business travellers from abroad, but few are coming to Bangalore now
R Krishnakumar | TNN

Bangalore: As the global economic meltdown has a cascading effect across sectors, another business community has highlighted its losses. Owners of luxury cabs in the city are now pushing for tax cuts.
For a sector heavily dependent on arrival of delegates and company officials from abroad, this cab service was bound to take a beating. With a business dip of up to 80%, cab-owners are going through their worst nightmare.
According to luxury cab-owners, the sector is already hit by stringent rules related to mandatory quality of vehicles as well as taxation. The recession has hit them harder.
“Most of us find it hard to repay loans. With business hit so badly, we now have to pay taxes even though the vehicles aren’t running,’’ says K S Thantry, president of Bangalore Tourist Taxi Owners Association (BTTOA).
The association has around 300 members, and hordes of agents are dependent on this sector. According to cab-owners, more than half the business is generated from transportation of delegates and tourists from abroad. The dip in arrivals, evident during early November, has hit the sector hard.
K Radhakrishna Holla, joint secretary, BTTOA, points out that corporates have been cancelling trips by overseas clients and employees, leaving transportation contracts in limbo. About 20,000 luxury vehicles — including high-end cars like Mercedes Benz — operate on hire. Holla doesn’t see an immediate respite, considering the measures corporates are taking to offset the financial crunch.
“Some conferences were cancelled after the Mumbai terror attack and this led to cancellation of transportation contracts,” says Holla. Association members are pushing for relaxed taxation and other sops to help them tide over the crisis. Cab owners pay around Rs 1,800 as annual road tax and 4.94% as service tax. According to members, a relaxation on service tax, at least till business picks up again, will go a long way in battling the crisis. TAXI BLUES
Luxury taxi owners feel recession heat
Owners say 80% of business hit
Sector depends on foreign delegates for over 50% of business
New contracts cancelled after Mumbai attack
Taxi owners push for reduction in taxes to offset damage