The cost of having so many private-hire cars here seems to outweigh the benefit.
The cost of having so many private-hire cars here seems to outweigh the benefit.
IT is probably too late, but has anyone done a cost-andbenefit analysis of having an unfettered private-hire industry here? Well, for what it is worth, here is a rough-and-ready examination of what Singapore has gained (and lost) by having around 47,000 taxi-like cars plying here – on top of the 23,000 licensed cabs on the road.
BENEFIT
• Better access to rides
Commuters are now able to get a ride far more easily than before, even on rainy Friday evenings. The sheer number of chauffeured cars on call here – which has grown by 2.5 times since Uber and Grab entered Singapore in 2013 – has made for improved availability.
• Competition
Drivers now have more choices in who they want to rent their cars from. Competition has driven rental rates down all round. Those who feel there is a stigma attached to driving a taxi are now able to drive an ordinary passenger car, albeit one with telling decals front and back. Competition has also resulted in discounts and promotions lavished on commuters. The newcomers, especially, are offering plenty of sweeteners (at least, for now) to win market share.
• Better use of assets
Passenger cars are typically idle 90% of the time. With the authorities allowing cars to be monetised, more motorists are offering their cars to be hired. This particular benefit is most apparent in the GrabHitch sphere, where ordinary motorists give rides (for a fee) to others who are going the same way as they are.
•Diminished desire to own cars
With people able to summon a ride with a couple of keystrokes, there is less need for them to own cars. At least that is the theory. If true, that is positive for land-scarce Singapore.
• Less unemployment
Jobless people are now able to find a ready alternative in the private-hire industry. With an extremely low barrier to entry, the industry is a source of livelihood for many folks.
COST
• Increased congestion
Private-hire cars typically clock three to four times the distances of passenger cars. So having 47,000 of them is equivalent to having an additional 140,000 cars on the road. Hence average speeds on our arterial roads and expressways have not improved in line with the expanded road network and the shrinkage in general vehicle population in recent years. The increased congestion also comes from private-hire drivers parking indiscriminately – causing obstruction – while waiting for bookings.
• Increased accidents
Early insurance data indicates that private-hire cars are more than twice as prone to accidents as ordinary passenger cars. This is also evident in the number of private-hire cars which are plying with dents and damages. This compromises road safety. Already, it is clear cars being driven erratically are invariably private-hire vehicles. Lawyers acting for insurers have also highlighted that it is much harder to file a claim if the accident involves a private-hire vehicle – a difficulty unique to such vehicles.
• Idle assets
The industry has an unhired rate of at least 10%, going by what Uber declared two years ago (when the total private-hire fleet was much smaller). This means more than 4700 idle cars, along with at least 2000 idle taxis. These vehicles could have gone to families which really needed a car, but were priced out by cash-rich private-hire operators.
• Deterioration of taxi services
With the revised training syllabus for vocational drivers, taxi-driver courses are no longer as stringent as before. Together with privatehire drivers who rely exclusively on satellite navigation, the days of drivers able to detour away from congestion or take clever short cuts are numbered. In short, professionalism in the driving trade will slide.
• A nation of drivers
The industry is attracting a sizeable cohort of young people who could have found more meaningful and productive employment. This cannot be good for the nation.
• Impact on public transport ridership
In other cities, the rise of ridehailing services has contributed to a fall in bus and train ridership. This cannot be good for Singapore, which has invested heavily in public transport in its efforts to be “car-lite”. In contrast, the privatehire industry is actually “car-heavy”.
• Mocking the system
Car loan curbs are in place to promote financial prudence. But private-hire firms allow marginal car buyers to go around curbs. Commercial fleet owners are exempt from the guidelines.
• Loss in tax revenue
Although the taxman is working with private-hire operators to have an auto-declaration for drivers, there is still a sizeable loss in GST. This is because many cars are either owned by driveroperators or by small fleet owners. Many of these do not reach the annual revenue threshold which requires GST payment.
CONCLUSION
Arguably, the cons outnumber the pros. But even if we assign more weightage to the first benefit (commuters having better access to rides), the cost-benefit ratio is not clearly in favour of having these private-hire cars here.
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"THE COST-BENEFIT RATIO IS NOT CLEARLY IN FAVOUR OF HAVING THESE PRIVATEHIRE CARS IN SINGAPORE."
Ride-hailing services and their privatehire cars have been beneficial to commuters, but at a cost to the country’s transport landscape.
TAXIS HIT THE SKIDS
Singapore’s taxi fleet has shrunk to its smallest in over 10 years, with the ubiquitous blue Comfort-branded cabs tumbling below 10,000 units for the first time since 2005.
According to the latest Land Transport Authority statistics, the taxi fleet stood at 23,140 as at December 31, 2017 – 19.5% down from its 2014 peak of 28,736.
The fleet of market leader ComfortDelGro tumbled to 13,244 – 22.1% down from its December 2015 fleet size. Its Comfort-branded cab numbers stood at 9825, while its CityCab taxis numbered 3419.
In contrast, Singapore’s chauffeured private-hire car population stood at 46,903 – more than double the taxi numbers – as at end-2017.
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