Thursday, 2 April 2015

New rules seek to simplify taxi fares

Standardisation of rates to include surcharges, but not flag-down fares
By Adrian Lim and Rachel Tan, The Straits Times, 1 Apr 2015

TAXI operators will have to abide by new fare rules from the second half of the year, in an effort to steamline fares and ease confusion for commuters.

Varying degrees of standardisation will be imposed on operators for surcharges, meter fares and booking fees.

But the Land Transport Authority (LTA) stopped short of streamlining the complex array of flag-down fares, a major bugbear among commuters. Taxi companies will be allowed to continue charging different flag-down fares for different cab models.

The recommendations are the result of a year-long consultation that the LTA and Public Transport Council (PTC) held with commuters and taxi companies and drivers, following calls to make the taxi fare structure less complicated.

"LTA and PTC will adopt a balanced approach... As mandating the harmonisation of flag-down fares may lead to higher flag-down fares for commuters, we will leave them as they are for now," they said.

The recommendations can be implemented only after changes to the Public Transport Council Act are made.

Once changes are approved, all 28,000 cabs on the road will have to charge the same peak-period, location, city, and midnight surcharge rates.

Currently, all companies levy a surcharge of 25 per cent of the metered fare during the peak period and 50 per cent during the late-night period. This will remain, but if there is a lack of consensus among cab companies in the future, the PTC will arbitrate in the matter to set a common standard.

Similarly, all taxis - regular or premium - will charge the same location-based surcharge. However, operators may opt out of imposing this surcharge if they wish. For example, currently only SMRT and Prime have a $3 surcharge for Marina Bay Sands at some times of the day, but the other cab companies have chosen not to impose this.

Standardisation for call booking rates and metered rates will be less stringent. Cab companies can choose how much they want to charge for these but they must maintain one set of rates for all their regular taxis and another for their premium taxis.

They must also follow the set time and distance parameters for these surcharges. For example, all operators must charge their unit fares every 400m after the first kilometre to the 10th kilometre, and every 350m thereafter.

Currently, all standard cabs have a metered rate of 22 cents. However, there are variations for premium models. For example, SMRT now charges a metered rate of 30 cents for its Ssangyong Rodius but 33 cents for the Chrysler 300C model.

In terms of booking fees, Prime has three different charges of $3.50, $5 and $6 during peak hours for its regular taxis. With the new rules, it will have to settle on one rate.

If cab companies want to introduce any new fare components, they will have to apply to the Public Transport Council for approval.

Commuter Rena Tan said that although she has to "continue paying different flag-down fares, at least some of the surcharges are now the same".

"But as there's a shortage of cabs usually, passengers do not have much choice and will take the cab even if they know it will cost more," added the 34-year-old business development manager.

We’ve consulted with commuters, taxi companies and taxi drivers over the standardisation of taxi fares. Commuters did...
Posted by Land Transport Authority – We Keep Your World Moving on Monday, March 30, 2015

New structure a good first step but 'won't have much impact'
By Adrian Lim and Rachel Tan, The Straits Times, 1 Apr 2015

NEW rules to regulate how cab companies structure their fares are a good first step but need to go further to make it easier for commuters.

Industry players say that the move announced yesterday will merely prevent fares from becoming more complex, but will not have much impact on the current situation.

Mr Ang Hin Kee, who is executive adviser of the National Taxi Association (NTA) which represents more than 13,000 cabbies, said: "We should take the next step down the road to see how we can redesign the taxi business model."

In the second half of this year, cab firms will have to follow certain rules in setting their fares. The components of metered rates, surcharges and booking fees will be standardised to varying degrees.

Mr Ang, who is also MP for Ang Mo Kio GRC, noted that even with the changes, cabs will still be able to charge different flag-down rates.

However, he acknowledged that this is not easy to unravel because of the different car models being bought by the companies at different times, with variables such as the prevailing certificate of entitlement prices and the exchange rate at that time.

The current business model, in which the flag-down rates are closely tied to the taxi rentals and costs, may have to be relooked for this to change, which could lead to a simplification of fares, he noted.

Cabbies like Mr Tham Yuet Kok, 66, said fares should be standardised across the board so that commuters will be less confused.

"Different fares also lead to conflicts between cab drivers. There was once I was in a cab queue, and the passenger chose to take my taxi instead of the two in front, because mine was the cheapest. When I drove off, the driver in front gave an obscene gesture," he said.

Full-time national serviceman Shen Hao, 23, said: "It would be best if all companies charge the same... but at least with some standardisation now, I know how much I will pay when I get into a particular company's cab."

Cab companies ComfortDelGro and SMRT, however, welcomed the changes and said they would do the necessary steps to implement the new regulations.

SMRT, which has two sets of metered rates for its premium cabs, will have to standardise this down to just one rate, to comply with the new rules.

But Mr Ang also raised concerns about the new fare structure being anti-competitive and said NTA was "watching this closely".

Cab fare review unlikely to help much
Missed chance to make more profound changes
By Christopher Tan, Senior Transport Correspondent, The Straits Times, 1 Apr 2015

THE Land Transport Authority (LTA) has made a valiant attempt at uncluttering Singapore's bewildering taxi fare structure.

The changes it proposed are likely to lead to a more structured system that prevents further clutter. But the review is unlikely to lead to a huge improvement.

That is because the biggest confusion lies in the flag-down rates (there are 12 currently), the dizzying array of taxi models (about 30), and what constitutes a premium cab and a non-premium cab.

Of the three, the range of flag-down rates is the most perplexing. There are seven, ranging from $3.20 to $3.90 for non-premium cabs, and five ranging from $3.50 to $5 for premium cabs.

The LTA opted not to harmonise flag-down rates for fear that operators might level them up and make commuters pay more. The differing rates - which are largely determined by taxi rental rates - act as a source of competition.

But there are ways of doing this without causing confusion to commuters - like competing on the quality of vehicles and driver benefits.

To be blunt, the differing rental rates devised by cab companies are merely a way for them to maximise profits. For instance, a new Korean taxi model commands a rental of $134 per day, compared with $105 per day for an older model.

The difference of $29 would add up to around $74,000 over the lifespan of a cab - almost twice the estimated difference between the purchase price and maintenance cost of the two cabs.

Which is why the National Taxi Association said "a review of the fare structure... is incomplete without a corresponding review of the rental issue".

The LTA added that commuters do not want fare harmonisation if it leads to a fare increase.

But if, say, the complex menu of surcharges were to be flattened, simplified or reduced, the average fare would not be higher.

In Hong Kong, the fare structure is a lot less complex, with one flag-down rate and uniform fare stages. Surcharges are few and low.

With surcharges, a taxi ride in Singapore costs more than an equivalent one in Hong Kong.

This is where the LTA missed an opportunity to make more profound changes.

Hong Kong's fleet of 18,000 taxis caters to one million trips a day. It takes 28,500 cabs in Singapore to match that figure.

This is because taxi drivers in Hong Kong are motivated to go where the commuters are. Those who do not will not be able to make ends meet.

In Singapore, a study found, once taxi drivers achieve their target take-home income for the day, they either call it a day or take it easy. Surcharges merely help cabbies reach their targets faster.

To get cabbies to work harder, Singapore introduced taxi availability standards two years ago. Since then, ridership has grown by 5.5 per cent from 967,000 to 1.02 million trips a day.

But it takes manpower and effort to enforce these standards. Would it not be better to go one step further to achieve a higher goal?

LTA's review is unlikely to improve our taxi system by much. It will only prevent it from getting worse.

PTC addresses concerns over taxi surcharges
By Isaac Neo, The Straits Times, 2 Apr 2015

THE Public Transport Council (PTC) has responded to concerns that taxi firms might violate the Competition Act by coming together to set the same taxi surcharges.

"Taxi companies will not fall afoul of the Competition Act in agreeing on the structure of certain taxi fare components, if they are doing so to comply with a legislative requirement," it said yesterday.

Under new regulations proposed by the Land Transport Authority (LTA) and the PTC on Tuesday, the structure of certain taxi fare components, such as surcharges, are to be the same across all taxi companies.

Mr Ang Hin Kee, executive adviser of the National Taxi Association, had said on Tuesday that allowing firms to set surcharges together may be anti-competitive.

Mr Ang, who is also MP for Ang Mo Kio GRC, said that in the past, taxi companies were not allowed to discuss uniform charges as that would infringe the Act.

"Allowing the operators to sit down together and discuss... common fares and rates may adversely affect commuters and drivers, without adequate checks and balances on the part of PTC," said Mr Ang.

Said the PTC: "LTA and PTC are standardising some parts of the taxi fare structure to prevent taxi fares from becoming more complex for commuters in the future."

As taxi fares have been deregulated, taxi companies can still charge different unit fares, booking fees as well as flag-down fares, the PTC added.

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