Indian ride-hailing firm’s S’pore launch delayed, amid talks with LTA
SINGAPORE — Amid grouses by some drivers about the slow processing of their applications, Indian ride-hailing firm Jugnoo told TODAY the roll out of its services in Singapore has been delayed due to ongoing discussions with the Land Transport Authority (LTA).
Jugnoo uses a "reverse-bidding" pricing system where drivers place bids for rides and riders select a bid based on a driver's rating, price and waiting time.
Declining to elaborate, the firm would only say the talks centre around the "appropriate documentation" which it needs to submit.
Responding to queries on Friday (May 4), LTA reiterated that it has reached out to Jugnoo to understand its operations better.
On whether Jugnoo's reverse-bidding pricing system could be an issue, LTA said it does not regulate fares charged by private-hire cars.
It did not reveal the issues under discussion with the firm but added: "All private hire car booking service operators will need to comply with the LTA's existing regulatory requirements when operating in Singapore."
Speaking to TODAY in a phone interview, Jugnoo chief technology officer Chinmay Agarwal said the firm was exercising caution, after observing the aftermath of Grab's proposed acquisition of Uber's South-east Asia operations.
Mr Agarwal, who co-founded the firm with chief executive officer Samar Singla, said he wants to make sure it gets the all-clear, after LTA had told the firm it can "do anything it wants" but the authority has the power to intervene if it sees anything amiss.
"(Although the regulators) do not give any certificate of clearance, they can shut you down if you are not following appropriate procedures. We are trying to identify appropriate procedures," he said.
The Grab-Uber deal, which was first announced on March 26, has been stalled with the Competition and Consumer Commission of Singapore (CCCS) stepping in to investigate it. Last month, the competition watchdog also ordered a set of enhanced interim measures to keep the ride-hailing market "open and contestable".
Mr Agarwal said the firm had written in to LTA to enquire whether it was required to submit any documentation ahead of its launch.
It was preparing to roll out its services on May 1 but on the same day, it received a reply from LTA spelling out the "exact information it needs from us", prompting it to postpone the launch, Mr Agarwal said.
Jugnoo, which was scheduled to launch on May 1, nevertheless has been recruiting drivers.
About 100 drivers had been enrolled and about 400 more are "at various stages of enrollment", it said.
Mr Agarwal said the firm is on track to meet its target of having 2,000 active drivers on its books by the end of the month. "We are just approving very few drivers whom we feel have all things submitted, and in parallel discussing with authorities," he added.
TODAY's attempts from various locations to book a ride on Jugnoo's app over the past three days were unsuccessful as there were "no drivers nearby". "Please try again after some time," the app prompted repeatedly.
Transport analysts attributed Jugnoo's teething problems to a lack of preparation and understanding of Singapore's regulatory landscape.
Transport specialist Terence Fan of the Singapore Management University said: "It sounds to me like the people in Jugnoo are still learning the ropes and have not done their homework, and are afraid of falling afoul of the laws."
Dr Park Byung Joon, an urban transport expert at the Singapore University of Social Sciences, said Jugnoo was "probably too optimistic" in targeting to launch on May 1 in their rush to get ahead of fellow ride-hailing newcomer RydeX.
RydeX, offered by homegrown firm Ryde, debuted with a promising start this week: It was used for over 2,000 trips on the first day of its launch on Wednesday. Some 5,000 drivers have also been approved by the firm to offer the service.
"Singapore is one of the easiest countries to start a business, so I expect Jugnoo's delay to be only temporary," said Dr Park.
Nevertheless, he expressed concerns that Jugnoo's reverse bidding system could cause drivers to jack up prices substantially for rides during peak hours and in the event of inclement weather, if the firm does not have a large enough pool of drivers. "Auction only works when there is extra capacity," he said.
