Taiwan Today

Under the scorching sun, cars inch along at a snail's pace while motorcycles dart in and out of traffic. Just another day in what has become known as Taipei's "dark age of traffic." The nasty gridlock which has become a part of daily life in the city is getting worse. Movement along Chunghsiao Road, the main east-west ar­tery through Taipei, has been disrupted by ongoing mass rapid transit construc­tion projects. And most neighboring streets have also been affected by the spillover.

It should come as no surprise that residents consider traffic the city's number one problem. Where time is money, chronic jams on city streets and the north-south freeway have led to higher operating costs for many businesses. One serious jam in Taipei forced Sea & Land Transportation Service, Inc. to deliver its cargo to Keelung by train instead of the usual container trucks. Chairman T. T. Ho (何添財) complains: "We lost NT$2,000 (US$80) per container, and with a total of twenty-three containers, we lost a lot of money."

But the entrepreneurial spirit is alive and well, and a number of businesses are thriving off Taipei's traffic problems. These include express delivery compa­nies, telecommunications businesses, motorcycle manufacturers, and the Tai­wan Railway Administration. By selling "transportation efficiency," they are winning the hearts of customers and turning a good profit at the same time.

Taipei's sorry traffic conditions has­tened the birth of the express delivery business. Six years ago, when conditions really started to become chaotic, small-scale "errand-running companies" made their timely debut. Since then, such com­panies have mushroomed as a result of the positive market response. And they got another big boost when construction started on Taipei's mass rapid transit system in 1988. "As of April 1991, there were 370 express delivery companies around the island," says Hsuong Kuo-Ja (熊國嘉), president of Yu-An Enterprise, a three-year-old express delivery com­pany, "This year, there are 500." Hsuong also points out that with a capital invest­ment of only NT$1 million (US$40,000) and three to five working partners, anyone can open an express delivery company.

What express delivery services sell is time. Daredevil delivery people race against the clock, fearlessly shooting through traffic and dodging in and out of slower moving cars to deliver letters and parcels. It is a dangerous job. In order to make the work more attractive, almost every express delivery company has adopted a generous commission system, with delivery persons paid up to two-thirds the delivery charge.

But not everyone has confidence in these relatively new companies. Some enterprises have chosen instead to set up delivery departments or subsidiaries of their own. President Chainstore Corpora­tion, for example, set up Retail Support International Corp. in Chungli, near Tai­pei. Deliveries and restocking begin every night after 8:00 P.M., when loaded trucks travel, via freeway to all 7-Eleven stores in greater Taipei. "We aim to avoid the rush-hour jams," says Chiu Te-chi (邱德祺), manager of Retail Support International's distribution center.

Another example is MSI International Corp., which deals in information technology. Currently they handle over four thousand express deliveries per month, nearly half of them within Taipei. To re­duce transportation costs, the company set up its own delivery department this January. According to J.J. Lin (林俊堅), senior manager of the Marketing Depart­ment, these days companies should have their own delivery systems, which enable them to "operate with mobility and re­spond immediately to market conditions."

The island's postal service cannot meet market demands for efficiency and promptness. Therefore, some larger ex­press delivery companies have expanded their operations to include a private postal service. These private post offices are giving the government's Directorate General of Posts a run for its money. In June 1991, Tahsun Express Mail was founded to provide an inexpensive, effi­cient express mail service. "We offer ex­press mail service for the price of an ordinary letter," says Lu Han-ching (呂漢青), the company's general man­ager. Such low rates are for bulk deliveries only. The company now employs two hundred people.

Private post offices are modeled on the public post office, but they claim to offer speedier service. To send one letter across town, many businesses are more than willing to pay an extra NT$50 (US$2) over the prompt mail rate charged by the post office. Private post offices guarantee same-day delivery, while the postal service takes one to two days. Yu­ An Enterprise, for example, handles at least two hundred deliveries every day. During summer vacation, when students work for the company part-time, up to four hundred express deliveries are made per day. These private mail services are even more efficient than ordinary express delivery companies. Express delivery companies normally do not have fixed routes, whereas the private post offices have carefully mapped-out routes. Their "postmen" also receive training before they start to work. Naturally, they are more efficient.

Private post offices are technically illegal under current regulations promulgated by the Ministry of Transportation and Communications. But this has not stopped their growth. Their services have won the loyalty of a number of publishing companies and cultural enterprises. One political-economic magazine has com­missioned Tahsun Express Mail to deliver its magazines to subscribers in six districts of Taipei.

Home delivery of pizza and other foods has also benefited from Taipei's clogged streets. Domino's Pizza, for in­ stance, guarantees ultimate efficiency­ delivery within 30 minutes or a NT$100 (US$4) refund. Domino's prompt deliv­ery of fresh, hot pizzas, has enabled its business to expand quickly. Eight new stores have opened in three years. Many lunch-box companies also deliver to home or office, and McDonalds has jumped on the bandwagon to offer home or office delivery for large orders.

Traffic is bad, but finding a parking space is often worse. A ten-minute trip to market may require an additional half hour to find a parking place. Unless ab­solutely necessary, few city residents feel like venturing out. Accordingly, suburban warehouse markets which provide ad­equate parking and the convenience of "one-stop shopping," are on the rise. In the past, most of these markets operated strictly as wholesale outlets, but now many are open to the general public. Shoppers get wholesale prices on a wide selection of goods. But more important, they can always be certain of gelling a place to park. Needless to say, the low prices and convenience are attracting a large number of customers. Makro Tai­wan, a self-service warehouse market, opened only two years ago and has al­ ready done NT$11.3 billion (US$447 million) in business.

Today in Taiwan, as in other in­dustrialized societies, telecom­munications products such as cellular phones, pagers, and fax machines are in some ways making cars and motorcycles obsolete. For Taipei resi­dents in particular, the attraction of these products is that business can be conducted from a car in the middle of a traffic jam or without leaving the office. "Where trans­portation fails, communications satis­fies," says Shjue Cheng-bih (薛承粥), deputy director general, Directorate General of Telecommunications (DGT).

The great convenience of such prod­ucts has pushed Taiwan's telecommunica­tions-related businesses to new heights. By the end of May 1992, the number of cellu­lar phone subscribers totaled 280,000, with an average of 15,000 new customers each month. By the end of this year, according to DGT'S Shjue, there will be 400,000 cellular phones in use, outnumbering those in de­veloped countries such as France (230,000) and Germany (240,000) and approaching Britain's 430,000.

The growth in the number of sub­scribers for pagers is equally impressive. At present there are more than one million in use, compared with 440,000 only four years ago. Product quality is also con­tinually upgraded to meet business de­mands. By the end of this year, pagers displaying messages in Chinese will be available on the market.

Furthermore, some enterprises are using telecommunications products to increase efficiency of operations. This January. MITAC International Corp. in­stalled a video conferencing system equipped with two video conference rooms—one in the Taipei head office and the other in the Hsinchu factory. The system, used for internal meetings in­volving executives at both ends, enhances company efficiency and helps save road time between Taipei and Hsinchu. Thanks to the video conferencing system, each executive "avoids wasting an hour and a half on the freeway," says Public Rela­tions Manager Jerry Wood. According to Wood, the remarkable efficiency of the system has attracted the interest of other companies, especially since the whole system cost less than NT$1 million (US$40,000).

The booming telecommunications market has led to the creation of many new businesses. Telephone answering services that transmit Chinese-language messages via computer, is one example. "In the past, such services required op­erators. Today, computers fulfill the same function," says Eric Wang (王志偉), sales manager of Hutchison Paging, which is primarily a computer answering service.

The "automated home security man­agement system," provided by Taiwan SECOM Co., Ltd ., is another new spin-off of the telecommunications industry. This system gives users remote control over four electric home appliances by tel­ephone. In actual practice, customers can enjoy the ease of having dinner cooked and laundry washed while they are com­muting simply by using their cellular phones. "Security services are not just crime-prevention services any more," manager Wang Tzu-ping (王執平) of Taiwan SECOM says proudly.

Taipei's traffic gridlock has also led to a rejuvenation of Taiwan's motorcycle market. Three years ago, the local motor­cycle industry was in a slump; last year the industry registered 23 percent growth. The increase ran counter to all previous projections. A few years ago the Ministry of Transportation and Communications predicted a continuing decline in motor­ cycle sales due to the increase in national income and the saturation of the motor­cycle market.

Motorcycles, especially small, auto­-shift scooters, have become remarkably popular for their size, mobility, and the ease with which they navigate through traffic. Taiwan's motorcycle manufac­turers produced a total of 1.17 million motorcycles in 1991, 46 percent of them were 50cc auto-shift scooters. "The dark age of traffic has created more room for the growth of light and agile 50cc motor­ scooters," says Lin Ji-sung (林吉松), vice general manager of Yamaha, one of the largest motorcycle manufacturers in Taiwan. "The worse the traffic condi­tions, the better the domestic motorcycle market."

Motorcycles are at best a stopgap solution for the problems of metropolitan commuters. And the cost is high. Ac­ cording to Environmental Protection Administration statistics, there are over 9.23 million motorcycles in Taiwan, or one motorcycle for every two residents. In terms of density, the figure is 349 motor­ cycles per square kilometer. In Taipei, the island's most congested city, it stands at 4,905 motorcycles per square kilometer—the highest in the world.

The Taiwan Railway Administration is another beneficiary of crowded streets. Rail transportation has enjoyed a signifi­cant growth in business, mainly because trains are not delayed by traffic jams, so passengers are assured of being on time. Taiwan Railway Administration statistics show that the number of passengers commuting between Taipei and Panchiao in Taipei county—a distance of about ten kilometers—is steadily increasing, from 20,500 passengers per day in 1989 to 23,000 per day in 1991. The increase of 11 percent in two years can be attributed to the serious jams on the roads between Taipei and Panchiao, particularly on the Huachiang and Kuangfu bridges that link the two cities. "Our commuter trains are now the fastest means of transportation available," says Chen Te-pei (陳德沛), deputy director of the Taiwan Railway Administration. And he is right. By train, Panchiao residents can reach downtown Taipei in fifteen minutes; by car or bus, the same trip requires an hour or more during the morning and evening rush periods.

But the number of businesses being drawn into the race for Taipei's gridlock bucks is creating new worries. For in­ stance, the over-development of tele­communications-related businesses has made the airwaves as crowded as the roads. In the light of such trends, it is im­perative that the government speed up construction of infrastructure and tele­communications projects. Otherwise, even night-time delivery and telecommunica­tions operations may soon find it difficult to survive the dark age of traffic. ▪