Intense competition in Bangkok's taxi market

On my last visit in Bangkok (my first) I was stunned by the magnitude of the city.
It is defenitely true that Bangkok represents the economic and socio cultural heart of Thailand. As it is difficult to get around in the city - partly because of the sheer magnitude and partly because of poor public transportation - a taxi is a necessity.

Now if you visit the city you'll instantly notice the density of taxi cars. My estimate - without having further data - would put the total number of taxis at around 30-40% of ALL cars. That is certainly an impressive number, suggesting intense competition in this market.

The truth is that the competition is even more intense that I would ever imagine. A short ride is as much as 1 US$. Incredible, since this short ride could even last a few kilometers. 60-70 Bhat, that is around 2 US$, bring you to most destinations within the city. I once travelled 15 minutes for 70 Bhat.

Since most of the taxis are relatively new this could only work at the expense of training. The result is that most taxi drivers don't even know main streets.
The other results are very low wages for taxi drivers.
One taxi driver told me that driving the whole night (at evelated fares) typically yields in not more than 10 US$ for him.
Even for Thai standards this represents a low income.

The question is: How long will this go on?
Obviously the profit margins for the taxi companies themselves have to be really low since it is very doubtful if the low fares cover for the writeoffs of the often brand new taxis.
Rising oil prices will put additional preasure on the market. With not many chances to pass the price increases to the consumer, most taxi companies will face preasure.

Additional preasure could arise from financing. Although I don't have any insight into the depth of this market I suspect that many taxi companies were able to finance themselves at low interest rates, making the leveraged purchase of a taxi attractive.

If now the financing costs are set to rise this could spell trouble for anybody who wants to leverage something.

Maybe this situation even represents a kind of rising inequality in developing countries, with a disproportionate share of the nation's income earned by already rich individuals.
All in all I'm courious how long this intense competition can hold up.


Odds:

Steep rise in Bangkok's taxi fares during the next 3 years : 55-75%

Being cheated with a taxi ride: at least 10%