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IN FOCUS: What does the future hold for Singapore's taxi industry?

SINGAPORE: There was a time, in the not too distant past, when trying to get a taxi in Singapore during rush hour was a stressful experience, beset with doubt and uncertainty.

And if it was raining, the situation was even worse. Demand would seemingly far outstrip supply, leaving some commuters stranded as they tried in vain to hail a cab or book one.

The situation became so frustrating that it was raised in Parliament numerous times. 

In 2014, former Member of Parliament Lee Bee Wah asked how the Ministry of Transport was addressing the problem of taxi shortages during certain times. 

Mr Lui Tuck Yew, who was then the Transport Minister, replied that the taxi availability standards introduced a year earlier had resulted in an additional 1,300 cabs plying the roads during peak periods.

The percentage of taxis plying at least 250km a day had also increased, as had the daily utilisation of taxis, he said then. 

"In short, more taxis are plying the roads, and more commuters are using them," said Mr Lui then. 

Yet it would seem that demand continued to outstrip supply as complaints persisted, and several taxi firms were fined for not being able to meet the availability standards.  

But then the dynamic shifted.

The introduction of private-hire car services through the likes of Grab and Uber saw many commuters shift away from traditional taxis.

And then another challenge emerged for the taxi industry: COVID-19. 

Now, Singapore’s taxi population has plunged by almost half in recent years. Taxi numbers dropped from 28,258 in 2016 to 15,865 as of the end of February this year - a 44 per cent drop. 

In contrast, the number of private-hire cars now stands at about 77,000 - almost five times the local taxi population. 

The sector has also been battered by the impact of the COVID-19 pandemic, with some drivers reporting a 70 per cent fall in income during last year’s “circuit breaker” period as tourist numbers fell and many worked from home. 

This drop saw some cabbies turn to food and grocery deliveries as a source of income amid the downturn. 

Meanwhile, electric taxi firm HDT - which was licensed as Singapore’s seventh taxi operator in 2018, becoming the first taxi firm to launch in more than a decade - pulled the plug on its taxi operations in December last year, blaming the “prolonged debilitating impact” of the COVID-19 pandemic. 

In light of these developments, what is the future for Singapore’s taxi industry? 

READ: HDT Singapore to shut its taxi business due to COVID-19; 94 employees affected 

File photo of HDT Singapore taxis. (Photo: Facebook/LTA)


Though taxis have plied Singapore’s roads since the early 20th century, the modern taxi industry began in earnest in the 1970s, when the authorities began clamping down on the so-called “pirate taxis” - commonly known as pa ong chia - that had competed with their licensed counterparts in previous decades. 

The industry grew further in 2003, as the industry was liberalised to allow for more operators and greater competition. This helped the number of taxis swell over the years, hitting more than 28,000 five years ago.

Despite this, however, there were complaints of passengers being unable to get a cab during rush hour or when it was raining. 

It was then that the growth of taxis hit a roadblock when ride-hailing gained popularity as Singapore-based Grab and Uber from the US offered commuters the convenience of getting a ride with just a few taps on their phones, while also luring them in with steep discounts to win them over.

Subsequently, the American ride-hailing giant’s exit from the region in 2018 saw new players such as Indonesia’s Gojek and South Korean operator Tada making their debut. 

In October last year, a new regulatory framework - dubbed the Point-to-Point Passenger Transport Industry Act - was introduced to help level the playing field between taxis and private-hire cars. 

The introduction of the framework saw four firms - ComfortDelGro, Grab, Gojek and Tada - granted ride-hail operator licences, and also introduced requirements for private-hire cars to be sent for regular inspections, just as taxis were. 

The framework also granted taxi drivers the ability to sign up with any ride-hailing firms to provide fixed-fare rides. 

READ: From taxi driver to transport ambassador: How Singapore’s cabbies are navigating the COVID-19 downturn

The main difference between taxis and private-hire cars now is that taxis are permitted to pick up street-hail rides, noted Singapore University of Social Sciences (SUSS) economist Walter Theseira. 

“We know that the market of passengers who are only willing to use street hail and (metered taxis), or who prefer to use (those options), that market has actually been shrinking year on year, ever since the introduction of ride hailing,” he said. 

“In that sense, the taxi market is a dying market,” said Associate Professor Theseira, who heads the master of urban transport management programme at SUSS. 

Figures from the LTA show that in February this year, there were 125,000 street-hail trips - which can only be done by taxis - compared to 471,000 ride-hail trips, which include both taxis and private-hire cars booked via an app. 

Despite the new framework, there are still discrepancies between taxis and private-hire cars, Assoc Prof Theseira said. 

For example, he pointed out that while private-hire cars can easily be converted to personal vehicles, taxis are not so readily repurposed.

"For legacy reasons, they're just treated quite differently in terms of regulation," he said. 

This can prove to be a disadvantage should taxi operators see the need to either expand or downsize their fleets, such as during the pandemic-inspired downturn, said Assoc Prof Theseira. 

He said the industry’s decline may be more difficult for smaller players in the taxi sector, which tend to have less brand recognition among customers. 

He noted that this is why smaller companies have tended to be quicker in partnering with ride-hail companies, recognising it as one of the only ways to keep drivers renting their taxis. 

National Trades Union Congress assistant director-general Ang Hin Kee - who is an advisor to the National Taxi Association (NTA), which represents the interests of drivers -  told CNA that cabbies he has spoken to say their business is now more viable than it has been in recent years.

This is in spite of the challenges posed by both private-hire cars and the ongoing coronavirus crisis. 

Taxis wait in line along Battery Road during the evening peak hour in The Central Business District of Singapore on Tuesday (Jun 6), the first day of Phase 1 post-circuit breaker. (Photo: Jeremy Long)

Mr Ang believes there is now a form of “equilibrium” between taxi and private-hire vehicles, and said that the reduction in the taxi population is a response to the needs of commuters. 

“The (taxi) fleet is more or less optimising itself to serve the passengers,” said the former deputy chair of the Government Parliamentary Committee for Transport. 

“You can’t increase the fleet expecting people to take it, it has to be the other way around.”

READ: Taxi, private-hire car drivers to get S$133 million additional COVID-19 support from January


Amid the industry’s downward trend, Singapore’s biggest cab companies have been broadening their horizons.

In February, industry leader ComfortDelGro - which saw its taxi fleet plunge from about 17,000 in 2016 to 9,577 as of the end of last year - announced it was launching a new ride-hailing service using private-hire cars.  

Last month, it also launched Zig, a “one-stop lifestyle and mobility app”, which allows users to make dining reservations and purchase attraction tickets in addition to booking taxis.

March also saw the taxi giant partner with French firm Engie to jointly bid for a tender to install and operate electric vehicle charging points at public car parks

READ: ComfortDelGro to launch ‘one-stop’ lifestyle and mobility app

Trans-Cab, the second largest operator with a fleet of 2,490 taxis - a 48 per cent drop from the 4,847 cabs the firm had in 2016 - has ventured into car financing and leasing amid the growth of ride-hailing.

Meanwhile, SMRT - whose stable of cabs has plunged by half over the past half decade - earlier this month announced it would be partnering with EuroSports Technologies to distribute electric motorcycles through its subsidiary Strides

The transport operator said that its plan to switch over its entire fleet of taxis over to electric vehicles over the next five years - its existing fleet of 1,796 cabs became fully petrol-electric hybrids last year - was also part of its “growth strategy in green businesses” under Strides.  

ComfortDelGro's Zig app will be available for download from Mar 9. (Photo: ComfortDelGro)

“ComfortDelGro is telling you (indirectly) that they are no more (just) a taxi operator,” said the NTA’s Mr Ang. 

Singapore Management University economist Terence Fan said that ComfortDelGro had previously dipped its toes into the private-hire market through a partnership with Uber, which allowed ComfortDelGro taxis to be booked through the American firm’s app. 

ComfortDelGro's entry into the private-hire sector is an attempt to capture part of the customer demand there, he said. 

The deal with the American firm would have seen ComfortDelGro take a 51 per cent stake in then-Uber owned car rental firm Lion City Rentals. 

This however fell through after Grab announced it was acquiring Uber’s business in Southeast Asia. 

Companies are responding to the needs of consumers, and they can no longer be considered purely taxi operators or private-hire operators, said Mr Ang. 

This is also the case for drivers, who have also largely followed their customer base in adopting ride-hail platforms as a source of business. 

“Nobody is enamoured by the fancifulness of the app, they are more enamoured by where the customers are coming from,” said Mr Ang. 

READ: SMRT plans to change entire taxi fleet to electric vehicles within 5 years

However, both taxi and private-hire operators face competition from the rising popularity of rides offered by drivers on messaging apps such as Telegram. 

One Telegram group, SG Hitch, has grown to almost 65,000 members over the past two years. 

Such groups have largely flown under the radar by positioning themselves as offering carpooling rides, as is currently allowed under the Road Traffic Act, said Mr Ang.

He said that drivers on such platforms may not adhere to regulations, aimed at preventing carpooling from becoming commercial operations. 

Under the Road Traffic (Car Pools) (Exemption) Order 2015, drivers can be compensated for costs such as fuel for offering carpool trips, but are restricted to offering only two such rides a day.

The NTA has urged the authorities to look into the matter, said Mr Ang, noting some drivers who violated the rules have already been prosecuted as a result. 

“We are still urging the authorities to take a harder look at it,  to make sure that it doesn't become a loophole or shortcut for people who don't qualify for the right licence, don't have the right safe vehicles and the right accountability to bypass the rules,” he said. 

In December last year a 27-year-old man - who had been suspended from driving for Grab - was sentenced to five years and 10 months' jail and six strokes of the cane after molesting four women he had picked up as passengers through carpooling chat groups on Telegram

The prosecution at the time noted the case demonstrated that such unregulated platforms “can be abused by drivers with nefarious intentions because of the sheer lack of accountability", comparing it to the background checks and other safety features by ride-hail platforms such as Grab. 

READ: Unregulated private-hire driver drove 4 passengers to secluded areas to molest them


Despite the downward trend over the past few years, there may still be life left in traditional taxi operations. 

“Taxis will continue to be an important and integral part of Singapore’s public transport scene, particularly the need to serve street hail rides,” said SMRT Taxis general manager Shaun Lee. 

“Today, more than 50 per cent of all SMRT Taxi trips are street hail rides,” he added. 

SMU's Assistant Professor Fan described the decline in taxi numbers as a "one-time adjustment" following the entry of private-hire operators. 

An increase in tourist numbers should Singapore be able to establish air travel bubbles with other countries or regions will l demand for taxis pick up, he said, noting this would put the industry in a better position. 

However, urban transport analyst Park Byung Joon believes that the flexibility of the private-hire vehicle means it is more likely to outlast conventional taxis. 

“If you look at history, the more flexible model always wins out at the end,” said the associate professor with the SUSS School of Business.

He added that the initial popularity of Uber and others was because they were perceived as providing a level of service that conventional taxis did not. 

Others however are more optimistic about the taxi industry’s chances. 

Cabbies are now accustomed to this hybrid model for point-to-point transportation, said Mr Ang, taking passengers from whatever avenue they come from. 

“Just like the vehicles are going hybrid, the drivers are also going to this hybrid model.”

Assoc Prof Theseira pointed to ComfortDelGro, which is still holding on to its traditional taxi business even as it is trying to capture the private-hire market as well. 

“My suspicion is there will continue to be a mix of these operations for some time to come,” he said. 

Source: CNA/az


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