Monday, 19 December 2016

LTA scrapping minimum daily mileage for taxis from 1 Jan 2017; More cabbies leaving the job amid stiff competition

Rule change from January seen as first step in levelling playing field between cabs and private-hire cars
By Adrian Lim, The Sunday Times, 18 Dec 2016

The Land Transport Authority (LTA) will ease up on regulations on the taxi industry from Jan 1 and scrap the 250km minimum daily mileage that cabbies now have to clock.

Taxis will still have to be out plying the roads during peak hours, but the taxi availability (TA) framework will be simplified, Second Minister for Transport Ng Chee Meng said in announcing the changes yesterday.

The easing of taxi regulations is seen by observers as a first step towards levelling the playing field between taxis and private-hire car services, which are currently unregulated.

The standards for taxis were introduced three years ago through the TA framework, and imposed on taxi operators in a bid to tackle commuter grouses of being unable to get a cab.

National Taxi Association executive adviser Ang Hin Kee said that the requirement for cabbies to clock a minimum mileage was a "rough proxy" to boosting the supply of cabs on the road. But it could have led to taxis cruising without a passenger.

With commuters turning to cab-booking apps, Mr Ng said that the demand and supply gap is being bridged more efficiently.

"We have also seen the rapid growth of private-hire car services like Uber and Grab. These innovations have provided more convenience for commuters for point-to-point transport," said Mr Ng, who is also Education Minister (Schools).

As of October, there were six cab companies in Singapore which run more than 27,500 taxis.

A news report in September estimated that Uber and Grab had a combined fleet of about 25,000 private cars.

National University of Singapore transport researcher Lee Der Horng said: "The availability of taxis and private-hire cars is able to jointly satisfy the commuters' needs, so this may provide some basis for the authorities to ease up on the regulations."

He added that the Government could also be trying to "equalise" the competition between taxis and private-hire car services by tweaking regulations.

Taxi operators were penalised for not having the required proportion of taxis meet the minimum mileage of 250km. This year, Premier was fined $12,118, Prime was fined $57,354, and SMRT was fined $43,753.

The changes mean that operators can save on compliance costs, such as tracking drivers to ensure they clock the required mileage.

Said Mr Ng: "We hope that taxi companies will consider passing on the savings to taxi drivers, by lowering rentals, for example, or improving welfare for them."

When asked, ComfortDelGro, the largest operator with over 16,700 taxis under the Comfort and CityCab brands, said that it would work with its cabbies to meet the revised standards.

The new regulations will mean taxi operators no longer have to ensure that at least 60 per cent of their fleets ply the "shoulder peak periods" of between 6am and 7am, and between 11pm and midnight.

However, between the peak periods of 7am and 11am, and 5pm and 11pm, taxi operators have to continue to ensure that 85 per cent of their fleets are on the roads, even after the changes.

Taxi driver Raymond Ong, 57, said that the revised standards "help to alleviate the burden of driving aimlessly and cruising empty".

Cabby Henry Tay, 48, said: "Sometimes, we may fall sick, and are unable to meet the 250km mileage."

Meanwhile, the LTA said it "will continue to monitor the taxi availability and introduce measures if needed".

Cabbies may fall back into bad habits without mileage rule

There are a variety of reasons why it is difficult to get a cab ("LTA scrapping minimum daily mileage for taxis"; Dec 18).

One reason, I suspect, is that many drivers are not hungry enough, and therefore do not drive as hard and take things easy.

Several cabbies have told me that they rent taxis more for their own use, and pick up commuters only when they want to.

The move to scrap the 250km minimum daily mileage that cabbies have to clock on Jan 1 will only enable such drivers to resume their old habits.

Commuters would then have to resort to ride-hailing services.

This is a risk for them, as the drivers do not have the same rigorous training as cabbies and may not have the appropriate insurance coverage, should accidents occur.

The Land Transport Authority (LTA) said that commuters will not be affected because taxi operators still have to ensure that 85 per cent of their fleets are on the road during peak periods.

But enforcement would surely be near impossible.

The LTA has to ensure that its recommendations are effective in practice when the changes are made.

Michael Loh Toon Seng (Dr)
ST Forum, 20 Dec 2016

Competition will keep cabbies on their toes - and on the road longer

I have been a taxi driver for more than 20 years. I know that passengers should never be taken for granted ("Cabbies may fall back into bad habits without mileage rule" by Dr Michael Loh Toon Seng; Dec 20).

I appreciate the removal of the 250km minimum daily mileage, as it means there would not be instances where I have to cruise the streets without a passenger.

This change will help cabbies, who face fierce competition from private-hire car companies.

Like regular businesses, taxi drivers have key performance indicators to achieve.

There is a minimum daily fare revenue to aim for and trips to be made in order for basic costs such as rental and diesel to be covered.

There are no short cuts in the business: If a cabby wants to earn more, the only way is to put in more hours on the road and be readily available to passengers.

The minimum daily mileage easily exceeds 250km in such cases.

Haniff Mahbob
ST Forum, 23 Dec 2016

Cabbies should drive service up a gear
Editorial, The Straits Times, 24 Dec 2016

Cabbies nationwide must have heaved a collective sigh of relief when it was announced on Saturday that the 250km minimum daily mileage would be scrapped from Jan 1. The rule was put in place to ensure that more taxis ply the roads, thus serving commuters better. But with competition from private-hire cars, it has led to situations where cabbies cruise the streets without a passenger just to clock the necessary mileage. Such aimless driving is not just a waste of time, fuel and resources but also benefits no one. It is high time that the rule took a back seat - in the best interests of both the driver and the commuter. But in giving the drivers of the estimated 27,500 taxis here some reprieve in their battle with about 25,000 private cars on the market, a fine balance must be struck between looking after taxi drivers and ensuring that taxis continue to provide a service that is both relevant and of a high quality.

There is no denying that the average taxi driver does, on paper at least, instil more confidence in the commuter. Taxi drivers here are better screened (they are known by their full names and not just user handles), often more experienced (taxi drivers need to be at least 30 years old, as opposed to 21 for private-hire car drivers) and trained better than the competition. Taxi drivers go through a 25-hour classroom programme and are assessed on their driving abilities on the road. At the moment, neither is done for private drivers, although a 10-hour course will be implemented under a new regulatory framework for Uber and GrabCar drivers next year. Insurance coverage is also clearer for taxi commuters as opposed to those in private cars. In taxis, they need not worry about whether the driver has paid his insurance premiums.

But for all these benefits, perceptions persist that some taxi drivers are not hungry enough or that they rent taxis for their own use and pick up passengers only when they want to. Commitment to service is also a question mark since, unlike private-hire drivers, traditional taxi drivers do not have a rating that commuters can see.

Thus, it is time for taxi companies and drivers to move their approach to service up a gear. With drivers freed from the burden of clocking the daily minimum mileage, they can be more focused and alert during the time they are with passengers. They could engage passengers more, be it by discussing preferred routes or by just asking how one's day has been. Aggressive driving should become a habit consigned to a more stressful past. The onus is on drivers to make certain that every ride is a smooth, pleasant and safe one. The scrapping of the minimum mileage rule should do more than eradicate aimless driving. Cabbies need to see that providing good service benefits them. It should be a win-win situation for both cabby and commuter on the new transport landscape.

* Rental cars, unhired taxis sitting idle
Pool of about 2,000 unhired vehicles shows market has hit saturation point, say insiders
By Christopher Tan, Senior Transport Correspondent, The Sunday Times, 15 Jan 2017

Private-hire operators are plagued by a rising number of unhired cars even as the overall rental car population keeps hitting record highs month after month.

Checks by The Straits Times last month revealed that there were close to 1,000 brand new cars - many wearing the Uber-owned Lion City Rental number plates - lying unused at a number of multi-storey carparks here.This mirrors the situation faced by taxi companies, which are also saddled with well over 1,000 idle cabs.

According to Land Transport Authority statistics, there are around 50,000 rental cars in Singapore - more than three times the rental car population before Uber and Grab entered the fray in 2013.

As many as 30,000 are attributable to private-hire companies such as Uber, Grab, EthozCab, Strides, Prime, Tribecar and Wolero.

The taxi population stands at around 27,500, 3 per cent smaller than in 2013. While the dip is relatively minor, it is a contrast to decades of continuous growth.

Insiders said the large pool of unhired vehicles is a sign that the market has reached saturation point.

"The honeymoon period is over," said the head of a rental fleet owner who declined to be named because he supplies cars to the main private-hire players.

"There are definitely not enough drivers to go around. And those who have been driving are finding out that it's not that easy to make a living."

Uber driver Jerry Yeo, 44, switched from a monthly rental car to an hourly arrangement with Smove recently because "the cost is lower". Mr Yeo has been driving with Uber for just over two years, but reckons he will not stay much longer. "The earnings are not attractive," he noted. "There are no long-term prospects."

Taxi driver Alan Tang, 54, said cabbies are also feeling the earnings crunch because of the heightened competition brought about by private-hire cars.

"We should do away with all the surcharges, which are killing taxi drivers," Mr Tang said, noting that private-hire cars do not impose such surcharges. "Otherwise, there will be fewer and fewer taxis on the road in the future."

Mr Tang added: "I was at the CityCab building last week and even the carpark ramps are filled with cabs. They've run out of space to park these idle taxis."

Asked about its unhired rate, a ComfortDelGro spokesman said: "We do not divulge competitive information."

Likewise, neither Uber nor Grab would comment on the number of idle cars they have.

"We don't disclose that kind of information," an Uber spokesman said. His Grab counterpart said: "We are experiencing a healthy demand for rental cars. Currently, there are more than 50,000 Grab drivers in Singapore."

SIM University economist Walter Theseira said: "The regulators want to take advantage of the potential third-party apps' offer to improve the taxi market, but they are very cautious about breaking the existing taxi pricing and operating model."

National University of Singapore transport researcher Lee Der-Horng said: "Supply has increased but demand has not grown accordingly.

"This is an unhealthy development for taxi drivers since most of them take up driving as their profession and it is their rice bowl. However, private-hire drivers are much more fluid since most of them are part-time drivers."

** More cabbies leaving the job amid stiff competition

Average rate of unhired taxis rising even as fleet has shrunk; second operator cuts rentals
By Adrian Lim, The Straits Times, 16 Jan 2017

More cabbies are throwing in the towel and exiting the taxi trade, underscoring the stiff competition they are facing from private-hire services like Uber and Grab.

Land Transport Authority data revealed that in the first 11 months of last year, the average rate of taxis that were unhired was 5.9 per cent, up from 4.2 per cent in 2015.

More than 1,620 taxis are now sitting idle in the yards of taxi companies, up from 1,190. This, even as the total fleet of taxis in Singapore has shrunk, from 28,300 at the end of 2015 to 27,500 currently.

The rise in the number of unhired taxis has prompted a second operator to slash rentals. Premier, with over 1,900 cabs, has cut its net rentals to mostly below $100 a day, a spokesman told The Straits Times.

In doing so, it follows in the footsteps of Trans-Cab, the second biggest operator here with 4,500 taxis, which has cut rental fees by between 22 per cent and 34 per cent for drivers hiring without a relief.

A Premier taxi driver, who did not want to be named, said he signed an incentive scheme starting last week that will allow him to earn incentives of $300 a month, as well as a $1,000 bonus if he completes a six-month-long contract.

Premier said it is offering such schemes to "support our drivers whose incomes have been affected by the sudden surge in the supply of taxis in the form of private-hire vehicles". Its rate of unhired taxis was "consistent" with the competition. Trans-Cab said last month that 11 per cent of its cabs were not hired out.

ComfortDelGro, Singapore's largest operator with over 16,700 taxis, did not respond when asked if it would be adjusting its rental rates.

The job of a taxi driver has become increasingly unattractive since Uber and Grab entered the market in 2013, say observers and drivers.

With no cap on private-hire vehicles allowed to roam the roads, the number of "taxi-like services" has boomed, said Dr Park Byung Joon, a transport expert at SIM University. "This has created a negative impact on the income potential, and becoming a taxi driver is less attractive."

There are about 25,000 Uber and Grab cars here. While private-hire operators also have unhired cars - nearly 1,000 as The Sunday Times reported yesterday - this is a matter of the market needing to reach equilibrium point, said Dr Park.

The challenge for taxi companies is more fundamental, he noted, adding that the authorities need to rethink what a "taxi" is. In its traditional form, taxis cannot compete with Uber-type businesses permitted to operate in Singapore, he said.

Meanwhile, taxi drivers said they are thinking of switching firms. Comfort cabby K.Y. Yuen, 40, who pays a daily rent of $110, said: "I'm hoping Comfort will cut the rental in time. If nothing happens after one or two months, I will jump to another firm."

He said his earnings are down by 20 per cent, especially at night when passengers want to avoid taxis' midnight surcharge.

SMRT launches new hourly rental scheme for cabbies

It aims to rent out unhired taxis and attract drivers by offering greater flexibility amid competition
By Adrian Lim, The Straits Times, 27 Jan 2017

SMRT unveiled a new taxi-sharing scheme yesterday, as it seeks to rent out its unhired cars and offer cabbies more flexibility.

It is the latest in a string of initiatives being dangled by taxi operators to attract drivers, as the industry faces competition from private- hire services.

Under SMRT's Taxi Share scheme, which will kick off next month, cabbies can rent taxis at an hourly rate of between $5.80 and $12.80, with a minimum rental period of three hours. For the first month, the promotional rental rate will start from as low as $3.80.

Hourly rental is a departure from the industry norm, in which cabbies pay rental daily, and are typically tied to contracts of between six months and a year.

SMRT's current daily rental rates are between $108 and $125.

Cabbies who register for SMRT's new scheme can go online to book a taxi. SMRT said it will start with eight pick-up and drop-off points in the northern and central parts of the island, with plans to expand this to 20. Cabbies unlock the cars using a mobile app. SMRT will maintain and service these taxis.

Mr Tony Heng, managing director of SMRT Taxis and Private Hire Services, said there are about 100,000 taxi driver vocational licence holders, and estimates that about 50 per cent of them are inactive. SMRT's new scheme will allow it to tap this pool of drivers who may want more flexibility, he said.

SMRT currently has about 5 per cent, or 175 cabs - out of its total fleet of 3,500 - which are not hired out. It plans to use these cars for the shared scheme, and may scale this up depending on demand.

Mr Heng said SMRT will work with the Land Transport Authority (LTA) to possibly review taxi availability standards for the shared cabs.

LTA requires a cab operator to have the bulk of its fleet on the roads during the peak hours, failing which it can be fined.

LTA said it "has received SMRT's request for exemption from the taxi availability framework and is assessing the request".

SMRT is the latest cab operator to adopt new measures to attract drivers. Many cabbies have quit or joined Uber and Grab.

In the first 11 months of last year, the average rate of taxis that were unhired in the industry was 5.9 per cent, translating to around 1,620 out of 27,500 cabs lying idle.

TransCab and Premier, which have fleets of 4,500 and 1,900 taxis, respectively, have slashed rentals. ComfortDelGro, the biggest firm with 16,700 cabs, has also launched a pay-as-you-drive scheme, in which cabbies pay rentals according to their mileage, said a report in Lianhe Zaobao.

ComfortDelGro's group corporate communications officer Tammy Tan said: "In a competitive environment, it is not unusual for companies to introduce schemes and promotions. We have and continue to do so, not just for our drivers, but their customers too."

SIM University economist Walter Theseira said of SMRT's new scheme: "This is an excellent example of how the taxi industry is finally changing its business model in response to the competition.

"SMRT believes that having the vehicle (rented) out for a few hours a day is better than having it idle."

Flexi-rental scheme from ComfortDelGro a hit with its cabbies

By Adrian Lim, The Straits Times, 2 Feb 2017

More than 1,000 cabbies from ComfortDelGro have opted for a new flexi-rental programme to help lighten the burden of paying their full rental fees daily.

The scheme, launched by the island's biggest taxi firm in September last year, is aimed at fighting the trend of cabbies exiting the industry in the face of stiff competition from private-hire car services.

Under the "25CJ" initiative, they can pay a lower rental fee - reduced by as much as half - every day, The Straits Times learnt recently from the scheme's participants.

In return, they must complete at least 25 booking jobs - also called current jobs (CJ) - in a week, and the fare earnings from these trips will be retained by ComfortDelGro as a form of rebate for the reduced daily rentals.

The amount collected, however, will be capped in a way that allows most cabbies to enjoy some net savings in their rental costs.

Sources said that more than 1,000 ComfortDelGro taxi hirers have signed up. Other flexi-rental schemes being rolled out by the firm include a pay-as-you-drive system, in which cabbies pay rentals according to their mileage.

ComfortDelGro, which owns more than 16,700 taxis - accounting for about 60 per cent of the market - declined to reveal more details when asked.

"In a competitive environment, it is not unusual for companies to introduce schemes and promotions," said its group corporate communications officer Tammy Tan, adding that the firm will continue to do so.

Mr Choo Joo Cheng, 59, a cabby who has joined the 25CJ scheme, said he used to pay about $100 a day to rent his Hyundai Sonata, but this is reduced to $85 to $90 now.

He said in Mandarin: "Competition is very intense from the private-hire car services. My income has dropped by about 20 per cent, compared to a few years back. So these savings help."

Mr Tan Ah Suay, 63, also under the scheme, said he saves between $40 and $80 each week.

Other taxi operators are also tweaking their rental fees and schemes. Trans-Cab and Premier have slashed rentals, and SMRT launched an hourly rental programme last week.

Said National University of Singapore transport researcher Lee Der Horng: "Cab operators are losing their taxi drivers and the number of unrented taxis are on the rise."

He said ComfortDelGro's 25CJ scheme is also trying to win over customers, by creating a pool of taxi drivers who will likely be more responsive to bookings.

"The company wants to assure customers that its service is reliable and responsive," Dr Lee added.


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