Taxi drivers went on strike outside the Ministry of Labour yesterday in Sharjah to protest a new rule requiring them to pay 0.52 fils for every kilometre travelled.
Taxi drivers went on strike outside the Ministry of Labour yesterday in Sharjah to protest a new rule requiring them to pay 0.52 fils for every kilometre travelled.

Sharjah taxi drivers strike over fuel fee



SHARJAH // Hundreds of taxi drivers have gone on strike in protest against a new rule that requires them to pay fuel costs.

The regulation from the Sharjah Transport Corporation (STC) would call for taxi drivers to pay 0.52 fils for every kilometre travelled, which some said would cost them almost half their monthly income. About 800 drivers gathered yesterday at the Ministry of Labour office in the emirate to protest against the move and 50 have reportedly cancelled their contracts.

"This is not justice," said Mir Zahid Mohammed, a driver who works for the Union Taxi firm. "Someone who was earning Dh2,700 a month would earn Dh1,400 now."

The struggle to deal with higher petrol costs, which rose 14 per cent in July in the second increase in three months, has caused taxi labour problems elsewhere in the Emirates. Ras al Khaimah drivers have twice come out on strike against a proposal to raise the amount they pay for fuel, which, they say, violates their new labour agreement.

Drivers from Citi Taxi started the stoppage on Monday just hours after the new rule was announced. Colleagues from Sharjah's other four taxi firms joined in yesterday. A spokesman for the labour ministry office in Sharjah said STC had been asked to solve the problem as quickly as possible. "We want them [drivers] to leave this place now to give parking to other people with other problems," he said.

Throngs of people could be seen on the emirate's roadsides desperately hailing taxis that would not pick them up. Among them was Umm Aisha, a mother of two who waited more than an hour for a cab to take her one-year-old daughter home from the hospital.

"The problem is that there are many taxis passing but no one is stopping," she said. "I have to call my husband to come from Dubai and take us home now."

Some drivers resumed work from 2pm, although they remained unhappy about the new regulation. Shahada Abedin, who works for Advantage Taxi, questioned the move and said it only worsened the already difficult business of driving for a living.

"Taxi company owners only think of themselves," he said. "The increased fuel prices affected all other business but, for them, they want to use it as a chance to make more profits."

For others, the new rule brought previous grievances into a new light. Mr Mir produced two receipts showing pay deductions of Dh600 to fix a scratch on his car and Dh50 for failing to hand in his daily income by the company-imposed deadline. He said he could not survive on a salary of less than Dh2,000, with which he had to pay rent, food, traffic fines and car washing.

"What kind of people are they, that want to take away everything they give us," he said.

"They would like to double almost every profit they are getting with our suffering."

Perhaps the most telling driver reaction came from Noor Habib, who works for Union Taxi, as he picked up his first passenger of the day from the Millennium Hotel at about 2.30pm.

"I know nothing would change even if we strike for the whole week," he said. "It's better to look for a job while you are working somewhere than leaving this job and go around begging for food."

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Key changes

Commission caps

For life insurance products with a savings component, Peter Hodgins of Clyde & Co said different caps apply to the saving and protection elements:

• For the saving component, a cap of 4.5 per cent of the annualised premium per year (which may not exceed 90 per cent of the annualised premium over the policy term). 

• On the protection component, there is a cap  of 10 per cent of the annualised premium per year (which may not exceed 160 per cent of the annualised premium over the policy term).

• Indemnity commission, the amount of commission that can be advanced to a product salesperson, can be 50 per cent of the annualised premium for the first year or 50 per cent of the total commissions on the policy calculated. 

• The remaining commission after deduction of the indemnity commission is paid equally over the premium payment term.

• For pure protection products, which only offer a life insurance component, the maximum commission will be 10 per cent of the annualised premium multiplied by the length of the policy in years.

Disclosure

Customers must now be provided with a full illustration of the product they are buying to ensure they understand the potential returns on savings products as well as the effects of any charges. There is also a “free-look” period of 30 days, where insurers must provide a full refund if the buyer wishes to cancel the policy.

“The illustration should provide for at least two scenarios to illustrate the performance of the product,” said Mr Hodgins. “All illustrations are required to be signed by the customer.”

Another illustration must outline surrender charges to ensure they understand the costs of exiting a fixed-term product early.

Illustrations must also be kept updatedand insurers must provide information on the top five investment funds available annually, including at least five years' performance data.

“This may be segregated based on the risk appetite of the customer (in which case, the top five funds for each segment must be provided),” said Mr Hodgins.

Product providers must also disclose the ratio of protection benefit to savings benefits. If a protection benefit ratio is less than 10 per cent "the product must carry a warning stating that it has limited or no protection benefit" Mr Hodgins added.

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