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The Shanghai Taxi Driver's MBA Lecture

The Shanghai Taxi Driver's MBA Lecture

I needed to go from Xujiahui to the airport, so I hurriedly concluded a
meeting and I was looking for a taxi in front of the Meiluo building. A
taxi driver saw me and very professionally came in a straight line and
stopped right in front of me. Thus followed the story that astonished me
greatly as if I had attended a lively MBA course. In order to faithfully
preserve the intent of the taxi driver, I have tried to reproduce his
original words according to my memory.

"Where do you want to go? Good, the airport. At Xujiahui, I loved to get
business in front of the Meiluo building. Over here, I only work two
places: Meiluo building and Junyao building. Did you know? Before I
picked you up, I circled around Meiluo building twice before I saw you!
People who come out of office building are definitely not going to some
place nearby ...."

"Oh? You have a method!" I agreed.

"A taxi driver must also have scientific methods," he said. I was
surprised and I got curious: "What scientific methods?"

"I have to know statistics. I have made detailed calculations. Let me
tell you. I operate the car 17 hours a day, and my hourly cost is 34.5
RMB ...."

"How did you arrive at that?" I asked

"You calculate. I have to pay 380 RMB to the company each day for the
car. The gas is about 210 RMB. I work 17 hours per day. On an hourly
basis, the fixed cost is the 22 RMB that I give to the taxi company and
an average of 12.5 RMB per hour in gasoline expenses. Isn't that 34.5
RMB?" I was a bit surprised. I have taken taxis for ten years, but this
is the first time that a taxi driver has calculated the costs this way.
Previously, the taxi drivers all tell me that the cost per kilometre was
0.3 RMB in addition to the total company fee.

"Costs should not be calculated on a per-kilometre basis. It should be
calculated on an hourly basis. You see, each meter has a 'review'
function through which you can see the details of the day. I have done a
data analysis. The average time gap between customers is seven minutes.
If I started counting the costs when someone gets in, it is 10 RMB for
about 10 minutes. That means each 10 RMB customer takes 17 minutes of
time, which costs 9.8 RMB (=34.5 x 17 / 60). This is not making money!
If we say that customers who want to go to Pudong, Hangzhou or Qingpu
are like meals, then a 10 RMB customer is not even a bite of food. You
can only say that this is just a sprinkle of MSG."

Great! This driver did not sound like a taxi driver. He seemed more like
an accountant. "So what you do then?" I was even more interested and I
continued my questioning. It looked like I was going to learn something
new on the way to the airport.

"You must not let the customer lead you all over the place. You decide
what you want to do based upon the location, time and customer." I was
very surprised, but this sounded significant. "Someone said that the
taxi driving is a profession that depends on luck. I don't think so. You
have to stand in the position of the customer and consider things from
the customer's perspective." This sounded very professional, and very
much like many business management teachers who say "put yourself in
others' shoes."

"Let me give you an example. You are at the entrance to a hospital.
There is someone holding some medicine and there is someone else holding
a wash basin. Which person will you pick up?" I thought about it and I
said that I didn't know.

"You take the one with the wash basin. If you have a minor complaint
that you want to be examined and to get some medicine, you don't usually
go to a faraway hospital. Anyone who is carrying a wash basin has just
been discharged from the hospital. When people enter the hospital, some
of them die. Today, someone on the second floor dies. Tomorrow, someone
on the third floor dies. Those who make it out of the hospital usually
have a feeling of having been given a second life and they recognize the
meaning of life again -- health is the most important thing. So on that
day, that person told me, "Go ... go to Qingpu." He did not even blink.
Would you say that he wanted to take a taxi to People's Plaza to
transfer to the Qingpu line subway? Absolutely not!"

"Let me give you another example. That day at People's Plaza, three
people were waving at me. One was a young woman who had just finished
shopping and was holding some small bags. Another was a young couple who
were out for a stroll. The third one was a man who wore a silk shirt and
a down jacket and holding a notebook computer bag. I spent three seconds
looking at each person and I stopped in front of the man without
hesitation. When the man got in, he said: 'Yannan Elevated Highway.
South North Elevated Highway ....' Before even finishing, he could not
help but ask, 'Why did you stop in front of me without hesitating? There
were two people in front. They wanted to get on as well. I was too
embarrassed to fight with them.' I replied, 'It is around noon and just
a dozen or so minutes before one o'clock. That young woman must have
slipped out at noon to buy something and I guess that her company must
be nearby. That couple are tourists because they are not holding
anything and they are not going to travel far. You are going out on
business. You are holding a notebook computer bag, so I can tell that
this is business. If you are going out at this time, I guess that it
would not be too close.' The man said, 'You are right. I'm going to
Baoshan.'"

"Are those people wearing pyjamas in front of supermarkets or subway
stations going to travel far? Are they going to the airport? The airport
is not going to let them enter."

That makes sense! I was liking this more and more.

"Many drivers complain that business is tough and the price of gas has
gone up. They are trying to pin the cause down on other people. If you
keep pinning the cause on other people, you will never get any better.
You must look at yourself to see where the problem is." This sounds very
familiar. It seems like "If you cannot change the world, then you should
change yourself" or perhaps a pirated copy of Steven Corey's "Circles of
Influence and Concern." "One time, on Nandan Road, someone flagged me
down and wanted to go to Tianlin. Later on, someone else flagged me down
on Nandan Road and he also wanted to go to Tianlin. So I asked, 'How
come all you people who come out on Nandan Road want to go to Tianlin?'
He said, 'There is a public bus depot at Nandan Road. We all take the
public bus from Pudong to there, and then we take the taxi to Tianlin.
So I understood. For example, you look at the road that we just passed.
There are no offices, no hotels, nothing. Just a public bus station.
Those people who flag down taxis there are mostly people who just got
off the public bus, and they look for the shortest road for a taxi.
People who flag down taxis here will usually ride not more than 15 RMB."

"Therefore, I say that the attitude determines everything!" I have heard
dozens of company CEOs say that, but this was the first time that I
heard a taxi driver say that.

"We need to use scientific methods and statistics to conduct business.
Those people who wait at the subway exits every day for business will
never make money. How are you going to provide for your wife and kids at
500 RMB a month? This is murder? This is slowly murdering your whole
family. You must arm yourself with knowledge. You have to learn
knowledge to become a smart person. A smart person learns knowledge in
order to become a very smart person. A very smart person learns
knowledge in order to become a genius."

"One time, a person wanted a taxi in order to get to the train station.
I asked him how he wanted to go. He told me how to get there. I said
that was slow. I said to get on the elevated highway and go this other
way. He said that it was a longer way. I said, 'No problem. You have
experience because you go that way frequently. It costs you 50 RMB. If
you go my way, I will turn off the meter when it reaches 50 RMB. You can
just pay me 50 RMB. Anything more is mine. If you go your way, it will
take 50 minutes. If I go my way, it will take 25 minutes.' So in the
end, we went my way. We travelled an additional four kilometres but 25
minutes quicker. I accepted only 50 RMB. The customer was very delighted
for saving about 10 RMB. This extra four kilometres cost me just over 1
RMB in gas. So I have swapped 1 RMB for 25 extra minutes of my time. As
I just said, my hourly cost is 34.5 RMB. It was quite worthwhile for
me!"

"In a public taxi company, an ordinary driver takes three to four
thousand RMB home per month. The good driver can get around five
thousand. The top driver can get seven thousand RMB. Out of the 20,000
drivers, there are about two to three who can make more than 8,000 RMB a
month. I am one of those two or three. Furthermore, it is very stable
without too much fluctuation."

Great! By this point, I admired this taxi driver more and more.

"I often say that I am a happy driver. Some people say, 'That's because
you earn a lot of money. Of course, you must be happy.' I tell them,
'You are wrong. This is because I have a happy and active mind, and that
is why I make a lot of money.'"

What a wonderful way to put it!

"You have to appreciate the beauty that your work brings. Stuck in a
traffic jam at People's Plaza, many drivers complain, 'Oh, there's a
traffic jam again! What rotten luck!' You must not be like that. You
should try to experience the beauty of the city. There are many pretty
girls passing by. There are many tall modern buildings; although you
cannot afford them, you can still enjoy them with an appreciative look.
While driving to the airport, you can look at the greenery on both
sides. In the winter, it is white. How beautiful! Look at the meter --
it is more than 100 RMB. That is even more beautiful! Each job has its
own beauty. We need to learn how to experience that beauty in our work."

"Ten years ago, I was a general instructor at Johnson's. Eight years
ago, I had been the department manager for three different departments.
I quit because there was no point in making three or five thousand a
month. I decided to become a taxi driver. I want to be a happy driver.
Ha ha ha ...."

When we arrived at the airport, I gave him my business card and said,
"Are you interested in coming this Friday to my office and explain to
the Microsoft workers about how you operate your taxi? You can treat it
as if your meter is running at 60 kilometres per hour. I will pay you
for the time that you talk to us. Give me a call." Then I began to write
down his lively MBA lecture on the airplane.