DUAL CHALLENGE
If the only way to get a taxi is through an app, taxi services would be just one tap away from ride-hail services. From the customer viewpoint, taxis would lose the competitive advantage of immediate, convenient availability on the street without any booking.
Side-by-side on the phone (even on the same app), the competition boils down to how quickly we can get a ride and how much it costs. It may be challenging for taxis on both counts.
Availability is a challenge as the pool of taxis dwindles. Over the last 10 years, between 2014 and 2023, the number of taxis fell by more than half from over 28,700 to 13,300. It is no coincidence that, during that same period, the number of private hire cars exploded from 1,600 to 53,400 as Uber, then Grab followed by Gojek entered the Singapore market.
Moreover, taxi fares seem to keep going up. In December 2023, taxi operators introduced a new weekend peak-hour surcharge and extended the daily evening peak surcharge by one hour. Comfort DelGro, the largest taxi operator, also increased its flagdown fare and distance-based rates for metered rides.
The two factors – availability and prices – are subtly related. Recently, my research team surveyed over 800 ride-hail drivers and found that 45 per cent drove or had previously driven taxis. Taxi operators are quite possibly raising prices to stem the defection of drivers to ride-hail platforms.
