It’s a messy system out there in the taxi world.
For many of us regular cab users, we’ve been hearing our fair share of complaints from taxi uncles on how Uber is “stealing” their business. On the other hand, there are many taxi drivers who are registered with ride-hailing services like Grab themselves. It’s a messy system out there right now in the taxi world.
The reality is that traditional taxi sector is facing major losses, with taxi drivers receiving the brunt of the damage. Private hire cars, with their cheaper rentals, have simply flooded the market and distorted recently supply. According to LTA, the average rate of taxis that were unhired last year was 5.9%, an increase from 4.2% in 2015. For many of these taxi drivers, the impact on their livelihood can be real and devastating. Specifically, earnings have dropped by at least 20% for some drivers, especially at night when Uber/Grab have the competitive edge through their absence of midnight surcharges. Some taxi drivers have also been trying to adapt to the volatile markets by changing firms.
Taxi Companies Fight Back
Unsurprisingly, more drivers are opting to work for Uber/Grab more than traditional taxi companies, given their flexible charging rates and cheaper rentals—resulting in more than 1,500 taxis unchartered from about 1,100 previously.
In order to counter the threat, many local taxi companies have cut car rental costs to help with the falling incomes of drivers and hopefully revive their demand. Premier rents out their cars at below $100 per day and TransCab had cuts up to 22-34%. Companies have also altered their schemes to prop up “drivers whose incomes have been affected by the sudden surge… in the form of private-hire vehicles.”
Switching Sides
Taxi drivers have also reflected some enthusiasm for registering with third-party cab-hailing apps due to the ease of finding customers through an app, instead of looking out on the road to catch potential customers. But the effect of lower fare prices is still a major pain that experienced taxi drivers have to endure.
What Do Singaporeans Think?
Despite these efforts, the situation is reaching a flashpoint for taxi drivers and the general public. We are no experts on transport matters here, but you can always rely on Singaporeans to voice their opinion on anything related to transportation. Many riders argue that the lack of demand for traditional taxi services are not only a result of the lower taxi fares offered by Uber/Grab, but also due to better quality and quantity of services provided.
Some will always remain skeptical
Helpful advice to Cab Companies
Valid points on the potential consequences if Uber/Grab were to dominate
What about government’s role in this?