Private-hire car operators to be licensed from next year as Parliament passes new regulatory framework
SINGAPORE: All ride-hail and street-hail service providers with a fleet size of more than 800 vehicles will have to be licensed from June 2020, after Parliament passed the Point-to-Point (P2P) Passenger Transport Industry Bill on Tuesday (Aug 6).
The licensing scheme focuses on larger operators due to the wider impact they have, and manages regulatory costs for smaller ride-hail service operators, allowing small and innovative services to emerge, said Senior Minister of State for Transport Dr Janil Puthucheary in Parliament as he presented the second reading of Bill.
Licence applications for street-hail and ride-hail service operators, including carpool operators, will open in February 2020. Major players such as Grab and Go-Jek will have to apply for the ride-hail licence, while existing taxi operators will be deemed to have a street-hail licence.
Ride-hail service operators with fewer than 800 vehicles will be exempted. Under the new rules, it will be an offence for any person to provide street-hail or ride-hail services without a licence or an exemption.
If convicted, these unlicensed operators may face a fine of up to S$10,000 or imprisonment of up to six months, or both, and a further fine of up to S$500 may be imposed for each day that the offence continues after conviction. It will also be an offence to drive for these illegal operators.
The framework will allow the Land Transport Authority (LTA) regulatory oversight over all major P2P operators in Singapore, said Dr Puthucheary.
He added: “This will help to facilitate an open market to support the development of responsive P2P services, while also providing sufficient regulatory oversight to protect the safety and interests of commuters and drivers.
“It is a necessary piece in our long term vision for a well-connected and convenient land transport network.”
In line with the revised regulatory framework, the Public Transport Council (PTC) will be given powers to ensure that taxi and private-hire car fares are clear and transparent, said Dr Puthucheary.
Licensed ride-hail service operators will be required to provide the flat fares for taxi and private-hire car bookings upfront to commuters, but they will be allowed to set the flat fares independently. PTC said LTA and PTC “will leave market forces to set appropriate fares”, and they do not intend to regulate how operators set dynamic, or surge pricing.
Dr Puthucheary said: “Dynamic fares have allowed better matching of supply and demand - with higher prices during peak hours and also lower prices during off-peak hours.
“This allows commuters to have a range of options at different price points.”
LTA also confirmed that these flat fares do not include ERP charges, although ride-hail service operators are required to inform commuters of the possible ERP charges on their trip.
There will be no changes to existing fare regulations for street-hail trips, with operators still required to charge metered fares.
Without sufficient regulatory oversight, the benefits of market-driven innovation can easily be lost, said Dr Puthucheary.
“For example, operators may compromise commuter and driver safety at the expense of profits," he added.
NEW SAFETY REQUIREMENTS
He also introduced the new safety requirements on licensed operators as part of the new regulatory framework. Industry stakeholders and members of the public consulted on the Bill agreed that enhanced safety measures are necessary and important, said Dr Puthucheary.
All private-hire vehicles will undergo an annual safety inspection.
A spokesperson for LTA said: "Licensed operators are required to meet certain safety standards, including a minimum first inspection passing rate, and accident and offence rates."
“LTA will track the number of accidents and driver offences that occur when a driver carries out a trip for a particular operator. Operators whose drivers have committed too many accidents or offences can be penalised through regulatory sanctions," said Dr Puthucheary.
“This is to ensure that operators play their part to encourage safe driving behaviour and reduce driver offences.”
In emergency situations, LTA can issue emergency directives to all P2P service operators, including those exempted from licensing. These directives include suspending the use of defective vehicle models.
Singapore now has about 20,000 taxis and 45,000 private-hire cars, said Dr Puthucheary, adding that more than two-thirds of all point-to-point commutes were made via ride-hailing apps, with the rest being street-hails.
According to LTA, taxis and private-hire cars made 276 million trips last year. Dr Puthucheary noted that the P2P commuter experience has improved significantly since the entry of third-party taxi and private-hire car booking service providers.
“Commuters today have more P2P options and enjoy better service standards than before. With better matching of demand and supply enabled by technology and a flexible driver pool, commuters now enjoy shorter waiting times for both street-hail and ride-hail journeys," he said.
He added that LTA will adopt a “light regulatory approach” towards service standards, to allow market forces to drive service delivery and improvement.
Under the new regulations, operators will be prohibited from offering exclusive arrangements to drivers that prevent them from driving for other operators.
“This is because such arrangements make it difficult for new players to enter the market, and naturally favour incumbent operators. This is detrimental to driver and commuter interests," he said.
Exceptions will be made for operators who directly employ drivers.
MINIMUM AGE FOR PRIVATE-HIRE DRIVERS?
Members of Parliament (MPs) who spoke during Tuesday’s debate supported the Bill, noting that the changes will help to level the playing field between the taxi and the private-hire car industries.
They raised several questions, with one being whether a minimum age should be put in place for private-hire car drivers.
Unlike taxi drivers who need to be at least 30 years old, there is no minimum age for private-hire drivers, who are only required to have at least two years of driving experience.
This means that a private-hire car driver can be as young as 20 years old, assuming one takes the driving test soon after turning 18, MPs said.
“So now, we have a situation (where) we would not trust a 20-year-old to act wisely when voting, but he is trusted to ferry our children and loved ones from point to point in a private-hire car,” said Chua Chu Kang GRC MP Yee Chia Hsing.
Mr Yee suggested a minimum age requirement of 25 years old for private-hire car drivers, while Ang Mo Kio GRC MP Ang Hin Kee recommended setting it at 30 years old instead.
This suggestion came amid concerns about having young adults take up full-time driving in the long run.
Non-Constituency MP Dennis Tan, for one, highlighted the risk of young drivers, especially those who drive full-tine, “becoming obsolete” given the possibility of autonomous vehicles in the near future.
If so, these young drivers may find themselves unemployable early in their working life and would need to be retrained, said Mr Tan.
On this, Dr Puthucheary said only about 4 per cent of private-hire car drivers are between the ages of 20 to 25, while another 12 per cent were between 25 and 29 years old. Many of these drivers are also "light part-time drivers".
Having a minimum age could affect the number of drivers in the P2P market, which may limit the number of rides available to commuters, he added.
Nevertheless, the Government is looking to review the number of drivers against the needs of the P2P market, and will study the age of drivers “carefully”, said Dr Puthucheary.
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ON FARES, PASSENGER SAFETY
MPs also supported allowing PTC to have oversight of fares, although they had differing views on whether more should be done.
While those like Nee Soon GRC MP Louis Ng stressed the need to not “overreach”, Tanjong Pagar GRC MP Joan Pereira suggested having upper limits for dynamic pricing so as to protect commuters’ interests.
“Given the breadth of service offerings and the dynamic nature of these conditions, I think we best leave it to market forces," Dr Puthucheary said in his reply.
Safety was also a hot issue, with MPs asking if there is a need to set and enforce standards for reporting emergency situations during rides, as well as require street-hail services to have child safety seats.
Under the Road Traffic Act, it is illegal for cars to carry passengers under 1.35m tall without a booster seat or a child restraint. Taxis are excluded from this ruling as they are considered “public service vehicles”, while private-hire car services are not.
“A Toyota Vios is a Toyota Vios, regardless of whether it was registered as a street-hail service or ride-hail service. This inconsistency in application of the law is not in the interest of the child,” said Mr Ng.
To that, Dr Puthucheary explained that the public and industry stakeholders were engaged “extensively” on this issue during the consultation period for the Bill. However, opinions “were very divided” among all groups and a compromise was not able to be reached in time.
The Government will continue to study it further, he added.