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

SINGAPORE: There was a time, within the not too distant previous, when attempting to get a taxi in Singapore throughout rush hour was a aggravating expertise, beset with doubt and uncertainty.

And if it was raining, the scenario was even worse. Demand would seemingly far outstrip provide, leaving some commuters stranded as they tried in useless to hail a cab or ebook one.

The scenario grew to become so irritating that it was raised in Parliament quite a few instances. 

In 2014, former Member of Parliament Lee Bee Wah requested how the Ministry of Transport was addressing the issue of taxi shortages throughout sure instances. 

Mr Lui Tuck Yew, who was then the Transport Minister, replied that the taxi availability requirements launched a 12 months earlier had resulted in a further 1,300 cabs plying the roads throughout peak intervals.

The proportion of taxis plying at the least 250km a day had additionally elevated, as had the each day utilisation of taxis, he stated then. 

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

But it could appear that demand continued to outstrip provide as complaints persevered, and a number of other taxi companies have been fined for not having the ability to meet the provision requirements.  

However then the dynamic shifted.

The introduction of private-hire automobile companies by way of the likes of Seize and Uber noticed many commuters shift away from conventional taxis.

After which one other problem emerged for the taxi business: COVID-19. 

Now, Singapore’s taxi inhabitants has plunged by virtually half lately. Taxi numbers dropped from 28,258 in 2016 to fifteen,865 as of the tip of February this 12 months - a 44 per cent drop. 

In distinction, the variety of private-hire vehicles now stands at about 77,000 - virtually 5 instances the native taxi inhabitants. 

The sector has additionally been battered by the influence of the COVID-19 pandemic, with some drivers reporting a 70 per cent fall in earnings throughout final 12 months’s “circuit breaker” interval as vacationer numbers fell and lots of labored from residence. 

This drop noticed some cabbies flip to meals and grocery deliveries as a supply of earnings amid the downturn. 

In the meantime, electrical taxi agency HDT - which was licensed as Singapore’s seventh taxi operator in 2018, changing into the primary taxi agency to launch in additional than a decade - pulled the plug on its taxi operations in December final 12 months, blaming the “prolonged debilitating impact” of the COVID-19 pandemic. 

In mild of those developments, what's the future for Singapore’s taxi business? 

READ: HDT Singapore to close its taxi enterprise because of COVID-19; 94 workers affected 

LEVELLING THE PLAYING FIELD

Although taxis have plied Singapore’s roads because the early twentieth century, the fashionable taxi business started in earnest within the Nineteen Seventies, when the authorities started clamping down on the so-called “pirate taxis” - generally referred to as pa ong chia - that had competed with their licensed counterparts in earlier many years. 

The business grew additional in 2003, because the business was liberalised to permit for extra operators and better competitors. This helped the variety of taxis swell over time, hitting greater than 28,000 5 years in the past.

Regardless of this, nonetheless, there have been complaints of passengers being unable to get a cab throughout rush hour or when it was raining. 

It was then that the expansion of taxis hit a roadblock when ride-hailing gained reputation as Singapore-based Seize and Uber from the US provided commuters the comfort of getting a journey with only a few faucets on their telephones, whereas additionally luring them in with steep reductions to win them over.

Subsequently, the American ride-hailing large’s exit from the area in 2018 noticed new gamers similar to Indonesia’s Gojek and South Korean operator Tada making their debut. 

In October final 12 months, a brand new regulatory framework - dubbed the Level-to-Level Passenger Transport Trade Act - was launched to assist degree the enjoying area between taxis and private-hire vehicles. 

The introduction of the framework noticed 4 companies - ComfortDelGro, Seize, Gojek and Tada - granted ride-hail operator licences, and in addition launched necessities for private-hire vehicles to be despatched for normal inspections, simply as taxis have been. 

The framework additionally granted taxi drivers the power to enroll with any ride-hailing companies to supply fixed-fare rides. 

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

The principle distinction between taxis and private-hire vehicles now could be that taxis are permitted to choose up street-hail rides, famous Singapore College 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 stated. 

“In that sense, the taxi market is a dying market,” stated Affiliate Professor Theseira, who heads the grasp of city transport administration programme at SUSS. 

Figures from the LTA present that in February this 12 months, there have been 125,000 street-hail journeys - which may solely be executed by taxis - in comparison with 471,000 ride-hail journeys, which embrace each taxis and private-hire vehicles booked by way of an app. 

Regardless of the brand new framework, there are nonetheless discrepancies between taxis and private-hire vehicles, Assoc Prof Theseira stated. 

For instance, he identified that whereas private-hire vehicles can simply be transformed to private automobiles, taxis aren't so readily repurposed.

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

This may show to be an obstacle ought to taxi operators see the necessity to both develop or downsize their fleets, similar to throughout the pandemic-inspired downturn, stated Assoc Prof Theseira. 

He stated the business’s decline could also be tougher for smaller gamers within the taxi sector, which are inclined to have much less model recognition amongst clients. 

He famous that because of this smaller corporations have tended to be faster in partnering with ride-hail corporations, recognising it as one of many solely methods to maintain drivers renting their taxis. 

Nationwide Trades Union Congress assistant director-general Ang Hin Kee - who's an advisor to the Nationwide Taxi Affiliation (NTA), which represents the pursuits of drivers -  advised CNA that cabbies he has spoken to say their enterprise is now extra viable than it has been lately.

That is regardless of the challenges posed by each private-hire vehicles and the continuing coronavirus disaster. 

Mr Ang believes there may be now a type of “equilibrium” between taxi and private-hire automobiles, and stated that the discount within the taxi inhabitants is a response to the wants of commuters. 

“The (taxi) fleet is more or less optimising itself to serve the passengers,” stated the previous deputy chair of the Authorities 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 automobile drivers to get S$133 million extra COVID-19 assist from January

BROADENING HORIZONS

Amid the business’s downward development, Singapore’s greatest cab corporations have been broadening their horizons.

In February, business chief ComfortDelGro - which noticed its taxi fleet plunge from about 17,000 in 2016 to 9,577 as of the tip of final 12 months - introduced it was launching a brand new ride-hailing service utilizing private-hire vehicles.  

Final month, it additionally launched Zig, a “one-stop lifestyle and mobility app”, which permits customers to make eating reservations and buy attraction tickets along with reserving taxis.

March additionally noticed the taxi large accomplice with French agency Engie to collectively bid for a young to put in and function electrical automobile charging factors at public automobile parks. 

READ: ComfortDelGro to launch ‘one-stop’ way of life and mobility app

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

In the meantime, SMRT - whose steady of cabs has plunged by half over the previous half decade - earlier this month introduced it could be partnering with EuroSports Applied sciences to distribute electrical bikes by way of its subsidiary Strides. 

The transport operator stated that its plan to swap over its complete fleet of taxis over to electrical automobiles over the subsequent 5 years - its current fleet of 1,796 cabs grew to become absolutely petrol-electric hybrids final 12 months - was additionally a part of its “growth strategy in green businesses” below Strides.  

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

Singapore Administration College economist Terence Fan stated that ComfortDelGro had beforehand dipped its toes into the private-hire market by way of a partnership with Uber, which allowed ComfortDelGro taxis to be booked by way of the American agency’s app. 

ComfortDelGro's entry into the private-hire sector is an try and seize a part of the client demand there, he stated. 

The take care of the American agency would have seen ComfortDelGro take a 51 per cent stake in then-Uber owned automobile rental agency Lion Metropolis Leases. 

This nonetheless fell by way of after Seize introduced it was buying Uber’s enterprise in Southeast Asia. 

Corporations are responding to the wants of customers, and so they can now not be thought of purely taxi operators or private-hire operators, stated Mr Ang. 

That is additionally the case for drivers, who've additionally largely adopted their buyer base in adopting ride-hail platforms as a supply of enterprise. 

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

READ: SMRT plans to alter complete taxi fleet to electrical automobiles inside 5 years

Nevertheless, each taxi and private-hire operators face competitors from the rising reputation of rides provided by drivers on messaging apps similar to Telegram. 

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

Such teams have largely flown below the radar by positioning themselves as providing carpooling rides, as is presently allowed below the Street Site visitors Act, stated Mr Ang.

He stated that drivers on such platforms might not adhere to rules, geared toward stopping carpooling from changing into industrial operations. 

Below the Street Site visitors (Automotive Swimming pools) (Exemption) Order 2015, drivers will be compensated for prices similar to gas for providing carpool journeys, however are restricted to providing solely two such rides a day.

The NTA has urged the authorities to look into the matter, stated Mr Ang, noting some drivers who violated the foundations have already been prosecuted in consequence. 

“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 stated. 

In December final 12 months a 27-year-old man - who had been suspended from driving for Seize - was sentenced to 5 years and 10 months' jail and 6 strokes of the cane after molesting 4 girls he had picked up as passengers by way of carpooling discussion groups on Telegram. 

The prosecution on the time famous 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

WHAT DOES THE FUTURE HOLD?

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,” stated SMRT Taxis normal supervisor 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. 

A rise in vacationer numbers ought to Singapore have the ability to set up air journey bubbles with different international locations or areas will l demand for taxis choose up, he stated, noting this is able to put the business in a greater place. 

Nevertheless, city transport analyst Park Byung Joon believes that the pliability of the private-hire automobile means it's extra more likely to outlast typical taxis. 

“If you look at history, the more flexible model always wins out at the end,” stated the affiliate professor with the SUSS Faculty of Enterprise.

He added that the preliminary reputation of Uber and others was as a result of they have been perceived as offering a degree of service that typical taxis didn't. 

Others nonetheless are extra optimistic concerning the taxi business’s possibilities. 

Cabbies at the moment are accustomed to this hybrid mannequin for point-to-point transportation, stated Mr Ang, taking passengers from no matter avenue they arrive from. 

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

Assoc Prof Theseira pointed to ComfortDelGro, which remains to be holding on to its conventional taxi enterprise at the same time as it's attempting to seize the private-hire market as effectively. 

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