Wed, May 05, 2010 page3

• FEATURE: Dealing and adapting with recession: a solitary affair

  SOLDIERING ON For many small mobile business operators, the proposed ECFA does not appear to faze them as they feel they can only depend and rely on themselves

  • By Ko Shu-ling / STAFF REPORTER
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  In times of recession, social security does not get much more complicated than having a job and a steady income.

  For mobile entrepreneurs who offer their services on wheels, an economic slump can affect their businesses in different ways.

  The quintessential form of this kind of business is taxi driving. Tseng Hsi-chen (曾熙鎮), a 54-year-old taxi driver, got into the business in poor economic times in 1994 when his business in the stock market and real estate turned bad and he needed money.

  During the SARS outbreak in 2003, Tseng’s new business grew dramatically because most people preferred to take a cab rather than public transport.

  His business also rose by 20 percent to 30 percent before President Ma Ying-jeou (馬英九) was elected in March 2008, he said, but it gradually diminished after he took office.

  At the beginning of this career, Tseng says he could make about NT$9,000 or NT$10,000 a day if he was lucky, but on not-so-lucky days, he made about NT$2,000, just enough to pay for his gas.

  With a steady clientele, he now works about 10 to 12 hours a day. Even when he does not have many random customers, he still has two to three regular clients who require long-distance services.

  He has seen 10 percent of his business disappear since the economic crisis, he says. Fortunately, he has a steady clientele he developed over the years that he can fall back on.

  The downturn also brought more competition. An owner of a private taxi company in Jhongli (中壢) says more and more people want to join her company and there is more competition in the business.

  She opened her business about 10 years ago, but declined to offer more details because she says her business is illegal.

  While Ma’s administration has planned to sign an economic cooperation framework agreement (ECFA) with China in the first half of this year, Tseng says the administration seems determined to push through the policy, but he does not have many expectations as to what it will bring.

  “It’s more practical to depend on myself,” he says. “If my car is older or service is poorer than others, I will be eliminated through competition no matter whether the trade pact is signed or not.”

  The Ministry of Economic Affairs (MOEA) has claimed that the proposed ECFA would drive up Taiwan’s GDP between 1.65 percent to 1.72 percent and increase employment by 257,000 to 263,000 people, citing a study conducted by the Chung-Hua Institution for Economic Research.

  Last year’s unemployment rate was 5.85 percent, the highest since 2004. The number of people who lost their job was 639,000 — 90,000 more than the previous year.

  Another group affected by slumps is street vendors. Ms Chen lost her job assembling accessories about two years ago. She is now in the vending business, selling white michelia and tuberoses. Her job begins at 4am when she rides her scooter from Sanchong (三重) to Taipei City to sell flowers.

  On good days, she says she makes about NT$700 to NT$800 a day, better than she used to make. Her husband makes a little bit more than she does, about NT$1,000 a day, she said, selling pens, gums and stationery.

  Beginning last year, however, her husband was denied the NT$4,000 monthly subsidy for the handicapped due to the ­government’s belt-tightening. Chen can still ­collect hers, but the untimely measure dealt a significant blow to her family’s finances.

  Despite the administration’s aggressive promotion of the trade pact, Ms Chen says she does not see how it would benefit her in any way.

  “It is more practical to rely on myself than to have any expectations from the government,” she says.

  Another mobile business operator is Chen A-ho (陳阿和), who performs custodial services for a number of apartment buildings by collecting garbage and recyclables.

  He quit his previous job 14 years ago because he barely made enough to support himself. His cousin introduced him to the business that he says pays a little more.

  The recession has cut down his earnings. He can no longer charge extra for the New Year holidays because his clients refuse to pay the additional expenses, he says.

  He is also facing more competition. He charges each apartment building NT$6,000 per month for a five-day service, but his competitor offers NT$5,000 for a full week.

  To expand the breadth of his clientele, Chen branched out from Taipei City’s Donghu area (東湖) to Lishan Street and Minquan E Road Sec 6, in Neihu District (內湖).

  For the cleaning, Chen said he makes about NT$10,000 to NT$20,000 a month and about the same amount from collecting recyclables if prices are good. The total earnings might not seem bad, but it is one tough job, he says.

  For 22-year-old Lin Ching-chiang (林經強), he just wanted extra money when he began delivering pizza about a year ago.

  The junior university student from Taipei says he works 20 hours a week and makes about NT$7,000 a month. He spends most of his earnings on clothes and entertainment and most of his school expenses come from loans.

  Other small businesses that require quick mobility are online stores. Sara Huang (黃玉�?pened her online boutique with a girlfriend in 2003 with the simple motive of helping family finances.

  The first batch of clothes they sold was purchased from wholesalers in Songshan District’s (松山) Wufenpu (五分埔). With only NT$5,000 in her pocket, Huang said they were both naive and gutsy to get their feet wet in the business.

  As selling ready-to-wear clothes was not a moneymaker, they switched to hand-knitted sweaters. Her friend quit six months into the business, but Huang hung on.

  Huang began selling clothes she designed for children for special occasions, such as Christmas and Halloween, in December 2004. To ensure the quality of her products, Huang affixed a label of “Made in Taiwan” on them.

  To save money, she had her son pose for the photographs and her mother, a professional seamstress, helped her with the sewing. During peak seasons, her business would perform four times better than during quiet seasons, she says.

  However, her son became too old to pose for the photographs and her mother later quit because of health problems.

  Huang then switched to mass production in 2005 so she could speed up the manufacturing process and bring down the costs. When the orders were ready, she would ride her scooter to pick them up from her seamstress in Sanchong and deliver them.

  Just when she thought things were going well, the global financial crisis hit and delivered a blow to her business. More competition and a lower birth rate also compounded the problem, she says.

  She did not get any orders for the year-end banquet season at the beginning of last year and retail sales dropped 10 percentage points to 20 percent. The sale of most lucrative line, Christmas and Halloween, outfits also fell dramatically. Things did not get any better this year as she again did not get any orders for the year-end banquet season.
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