Sunday, 11 October 2015

Can't find cabs on the road? Try the yard

Up to 2,000 taxis are lying idle - unhired as factors such as higher rental and competition from taxi app firms bite
By Christopher Tan, Senior Transport Correspondent, The Straits Times, 10 Oct 2015

If you find it harder to catch a cab these days, it could be because as many as 2,000 of them are lying idle in yards instead of plying the roads.

Higher rental rates, stricter service standards, competition from newcomers such as Uber and GrabCar, and higher incidence of traffic summonses have prompted many cabbies to give up driving taxis.

Trans-Cab, the second largest cab operator here, is one of the biggest victims of this fallout. When The Straits Times visited its premises in Defu and Sungei Kadut last week, there were as many as 800 red taxis parked bumper to bumper, many covered with a visible layer of dust.

The number could work out to 15 per cent of its fleet - the highest unhired rate since Premier Taxis could not hire out 10 per cent of its fleet in early 2009.

"Uber and GrabCar," managing director Teo Kiang Ang said immediately when asked about the situation. "These companies don't have to follow the LTA (Land Transport Authority) rules on taxi availability. They use nine- to 10-year-old cars; we cannot. They pay very low insurance premiums.

"They're having a free lunch."

Even if the other operators experienced a fraction of Trans-Cab's unhired rate, the number of cabs lying idle is likely to exceed 2,000.

Premier Taxis chairman Timothy Chua said there has been a dip in his fleet's hired-out rate, "but the alarm bells have not rung yet".

"There aren't enough drivers," he said. "It's hard to find good drivers."

Dr Lee Der-Horng, a transport researcher with the National University of Singapore, said the whole industry is affected by drivers switching to the likes of Uber and GrabCar. But the smaller cab operators are bearing the brunt of this, possibly because their drivers are not getting enough call bookings from their own dispatch systems.

"Having experienced the benefits of those taxi apps as compared to their own dispatch system, they switch," said Dr Lee.

"In future, nobody will want to be a taxi driver," he said. "The Government must do something."

ComfortDelGro, which accounts for 60 per cent of Singapore's total fleet of 28,600 cabs, declined to comment on the number of its taxis which are not hired out, saying it was "competitive information".

However, a stock analyst, who is covering the transport giant, said it was considering rolling out new incentives to attract drivers in the light of new competition. SMRT is doing likewise, confirmed its spokesman Patrick Nathan.

However, these may not be enough for some cabbies, who said driving a cab has become harder with new service standards stipulating that a taxi must clock at least 250km a day. "With Uber or Grab, you don't have to do this," said one. "You just wait for business to come to your phone."

With the roll-out of more bus lanes and illegal parking enforcement cameras, cabbies are also facing more fines now.

Trans-Cab cabby Francis Goh, 61, said: "Since taxis are a form of public transport, why not let us use the bus lanes as long as we don't stop?"

However, the single biggest factor behind the idle taxis is the higher rental rate. Daily rentals now range from around $130 for a regular cab to about $180 for a new Mercedes-Benz taxi - 50 per cent to 60 per cent higher than a decade ago.

The rental for an Uber car is as low as $60 a day.

An industry source said 30 per cent to 40 per cent of drivers who signed up with Uber and GrabCar fleets are former cabbies. There are an estimated 3,000 of such cars providing on-call taxi services.

Cabbies who have switched said attractions include having access to a car that does not have a taxi sign on its roof, and being able to fetch clients to Malaysia and back.

Mr Thomas Tan, 50, was among half a dozen cabbies who had given up their Comfort Mercedes cabs for Toyota Alphard MPVs.

"This is the new direction, and we're embracing it," he said.

His colleague Leslie Chang, 46, said: "This is like having our own car with a private number plate."

On average, Mr Chang said he does five to eight trips a day. "In a taxi, we had to do 20," he noted.

They pay less than $140 a day on rental, versus $178 for the Merc.

The LTA said 3.8 per cent of taxis - or more than 1,000 - were unhired as at June. Observers reckon the figure has climbed since.

Up to 2,000 taxis are lying idle - unhired as factors such as higher rental and competition from taxi app firms bite
Posted by The Straits Times on Friday, October 9, 2015

GrabCar, Uber fuel surge in rental car numbers in Singapore
More than 24,500 such cars on the road as of August, a 38% jump from same time last year
By Adrian Lim, The Straits Times, 12 Oct 2015

With the rise of ride-booking services like Uber and GrabCar, a lot more rental cars are now on the road.

Statistics from the Land Transport Authority (LTA) show that there were 24,573 rental cars as of August - a 38 per cent jump from 17,786 in August last year. At the end of 2013, the figure stood at 16,396; in 2012, it was 14,862.

Rental cars are defined as those leased out for personal use or for private chauffeuring purposes.

Industry observers say it is likely that the second group is driving the boom in rental car numbers, given the growth of Uber and GrabCar.

Mr Peter Cheong, president of the Vehicle Rental Association, said: "If we are just looking at the population growth in the last 12 to 18 months, we are inclined to say that the apps-based model of limousine services has been the leading cause for the accelerated growth."

When drivers sign up to drive for ride-booking services Uber and GrabCar, they are given the option of using their own car or renting one - as long as the vehicles are commercially insured and registered.

The latter option is more popular, given that it is expensive to own a car here. Also, rental firms charge as little as $60 a day for a basic saloon model and look after the maintenance and servicing of the cars.

Mr Chan Park, Uber's general manager for South-east Asia and strategy and operations lead, said drivers sign up as employees of the rental firms or set up a chauffeur business, and then rent the cars.

Mr Chan added that 85 per cent of its drivers opt for a rental car as it involves "less upfront costs".

A check on Uber's website shows that it has 29 rental firm partners. Rival GrabCar does not publicly list its partners, only saying it has "a few".

Not only has the number of rental cars gone up, but there are also more car rental companies now.

Mr Adrian Lee, co-founder of online rental portal Drive.SG, estimates that there are now over 180 car rental companies, with 30 to 40 of them registered in the last year.

"And 90 per cent of them are small firms. I call them micro car rental companies because they have small fleets of two to 10," said Mr Lee.

Industry players believe many of the new firms are set up to serve the Uber and GrabCar market. Since they have little financial muscle to acquire new cars, they buy vehicles due to be scrapped and convert them from a personal-use classification to one for rental.

For the first half of this year, there were 3,143 conversions to a private-hire classification - around 63 per cent more than the 1,933 for the whole of last year, according to LTA figures.

But the size of Uber and GrabCar's fleets is anyone's guess. An industry source who declined to be named said the organic growth of the rental car pool had previously stayed consistent at 7 to 10 per cent annually. It is impossible to differentiate between those for self-drive and those for chauffeuring, he said.

An LTA spokesman said: "Both categories of private-hire cars can be used interchangeably as public service vehicles, as long as the cars have the appropriate insurance."

National University of Singapore transport researcher Lee Der- Horng calls the boom in this market of private chauffeur cars an "unhealthy trend" that could undermine the taxi industry.

Dr Lee said that private chauffeuring was once a distinct industry from taxis but, because of Uber and GrabCar, these for-hire cars act almost like a "cab booking service".

Given their age, these cars may not be as well-maintained as those of a taxi company's fleet, leading to safety issues for passengers, he said.

When asked, GrabCar's regional head Lim Kell Jay said every car is inspected. Uber's Mr Chan said rental firms are "incentivised" to maintain their cars to avoid repair costs and to ensure their fleets are well-used.

Despite the controversy surrounding these private "taxis", commuters here say they have benefited from them. Investment analyst Ong Boon Han, 35, said: "During the peak hours, when it is hard to get a cab, these private cars help to fill the gap."


No comments:

Post a Comment