The line separating those who drive and those who are driven is blurred.
The line separating those who drive and those who are driven is blurred.
Taxi/ride apps such as Uber and Grab are not about carsharing or car-pooling.
SINCE they arrived some three years ago, Uber and Grab have established themselves as the two dominant ride-booking apps in town.
Their presence here has been marked by controversy and conflict. Taxi operators hate them, accusing them of unfair competition. Commuters (especially the well-heeled) love them, since they seem to fill a niche left vacant by cabs.
The Government is welcoming them, as its recently announced set of “light touch” regulatory guidelines suggest. And because of these guidelines, fleets started by Uber and Grab still have distinct advantages over taxis.
They have a longer statutory lifespan; they do not have to meet service standards; they can grow as much (or as little) as the market demands; and their unmarked cars with relatively low rentals make them far more attractive than taxis.
The only thing they still cannot do is pick up street hails. But increasingly, people are relying on phone apps to “hail” a ride. It will be a matter of time when street hails become the exception rather than the rule.
The reason why the Government is not regulating them more stringently (or banning them outright like some other countries) lies in its belief that Uber and gang are part of the sharing economy.
Certainly, the apps’ providers market themselves to be as such. But are they?
Most certainly, not. They are taxi operators by another name. They are taxi operators with technology and clever data analytics. They are taxi operators without huge asset ownership, and the risk of hefty capital investment that comes with ownership.
In the automotive sector, the shared economy would be car-sharing and car-pooling apps. Uber and gang are taxi/ ride apps.
In three short years, they have amassed an estimated combined fleet of 10,000 cars, which is more than onethird Singapore’s total taxi population. If their growth rate is sustained, they will overtake taxis in fleet size by 2020.
By then, you can be sure their charges will not be as competitive as they are now (even if charges are sometimes already higher than taxi fares).
Their fleets will be harder and harder to regulate because they are owned by several rental companies. And the anonymity of their vehicles may pose safety and security concerns (proposed decals may be easily removed or duplicated).
But what will be their impact on car ownership, if any? The Government seems to think that Uber and Grab cars are “shared”, and therefore, they will quench the thirst for private car ownership.
It is hopeful thinking. Uber and gang will not diminish the desire to own cars. In fact, they are fuelling the car dream. Just look at Uber’s advertising and marketing campaigns – they all tout easy car ownership with low downpayments and the prospect of financing that dream by signing on as drivers.
This relentless courtship has whipped up strong demand, as Uber’s aggressive COE bidding in recent tenders shows. But the honeymoon will be short-lived. If drivers are finding the going tough, wait till the day Uber goes autonomous. Futurists believe that autonomous cars will be widespread by 2030 – less than 14 years from now.
When that happens, drivers will be dropped like hot potatoes. But of course, the whole transportation scene may change by then, and people may not yearn to own a car as strongly as they do today. Because an autonomous vehicle is, in fact, a shared vehicle.
What will happen to taxis and private cars, then? For sure, their numbers will shrink. But there will still be demand for taxis, especially those driven by savvy cabbies.
These cabbies, as experience tells you, will be able to get you to your destination in the shortest time regardless of traffic and weather conditions. Because their knowledge of routes is better than any sat-nav system. And they will be able to drive faster than autonomous vehicles, which will be programmed to drive conservatively and to always obey speed limits.
As for private cars, those who enjoy driving will continue to want their own set of wheels. They may want exclusive ownership, which will foreseeably be much costlier than now. Or they may share their cars, via apps which will tell potential like-minded users where and when their vehicles will be available.
When that day arrives, the lines between private cars, taxis and privatehire vehicles will be even fuzzier than they are now.
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UBER AND GRAB ARE TAXI OPERATORS WITH CLEVER DATA ANALYTICS AND WITHOUT HUGE ASSET OWNERSHIP.
