SINGAPORE – Between the second quarter of 2023 and the second quarter of 2024, the number of active private-hire cars (PHCs) and taxis increased by 8 per cent, while the average daily number of point-to-point (P2P) trips increased by just 1 per cent during the same period.
This has moderated fares and drivers’ earnings, said Senior Minister of State for Transport Amy Khor on Sept 10. She added that the average cost of P2P trips had also declined in the first half of 2023 after peaking at the start of that year.
P2P fares are subject to “seasonal fluctuations”, Dr Khor said, and tend to rise during festive seasons and in months when there are major events, such as Taylor Swift’s concerts in March and Coldplay’s concerts in January. Conversely, demand dips during school holidays, when many Singaporeans are abroad. These peaks and troughs in demand affect drivers’ income, she noted.
She was responding to questions in Parliament on the P2P transport industry, including whether the Ministry of Transport (MOT) monitors the earnings of taxi and PHC drivers, and whether the Government monitors the supply of such drivers in relation to demand for P2P services. A question was also raised about whether the current capacity of the P2P sector – with a high number of drivers – is sustainable.
Instead of limiting the number of P2P drivers, the Government has opted to “allow the supply of P2P drivers to move in tandem with commuter demand and price signals”, Dr Khor said. In 2023, an average of 606,000 daily trips were made by about 67,000 taxis and PHCs.
“The appropriate level of supply for the sector depends on the level of commuter demand and the fares they are willing to pay,” she said. High demand – and the resulting fare increases – tends to incentivise drivers to enter the market. When there is an oversupply of drivers, fares drop and some drivers may decide to exit the market, Dr Khor noted.
To address drivers’ concerns, she said the Land Transport Authority (LTA), which is undertaking a review of the P2P sector, would consider “ways to support the smooth and efficient functioning of the sector”.
These include measures to reduce operating costs, such as extending the statutory lifespan of taxis to 10 years, up from eight years – a move that was announced in March. “The operators should pass these cost savings to drivers via lower rentals,” Dr Khor said.
She also acknowledged concerns about illegal P2P services provided by foreign vehicles, which impact demand and therefore drivers’ earnings. Dr Khor said LTA has stepped up enforcement against these errant drivers in recent months and will continue to do so.
Mr Desmond Choo (Tampines GRC) later asked Dr Khor how MOT can support P2P drivers “during times of protracted low fares”. He said the labour movement had received feedback from some taxi and PHC drivers whose earnings have dropped by more than 30 per cent over the last six months. Mr Choo asked: “How do we balance between adequate supply and the livelihoods of these drivers?”
In response, Dr Khor said P2P services are a “demand-responsive” mode of transport and reflect “market forces at work”. While she acknowledged that average fares have declined in recent months, she said that it is important for drivers to “look at total earnings across time, instead of just lower-fare periods”.
She also said that drivers can “make informed decisions, such as when to drive and which rides to take”, and use multiple ride-hailing platforms to “maximise their earnings based on their driving preferences”, referring to the P2P sector’s transparency regulations and multi-homing rules.
Regarding Mr Choo’s point about balancing supply and the livelihoods of drivers, Dr Khor said that instead of “predetermining supply”, the Government prefers that the market “remains open, dynamic and contestable”, with room for new players.
Finally, in response to a question from Nominated MP Jean See Jinli regarding drivers who may be “locked” into unfair vehicle leasing contracts, Dr Khor said the Government is looking into how to “assist and educate” drivers who enter into contracts with car rental companies.
The P2P transport industry is under review to ensure that services stay relevant as commuter needs and the industry evolve.
The review, announced in 2023, is due to be completed by the second half of 2024. It will focus on improving the stability of the supply of taxis and ride-hailing services, ensuring that services can be provided with minimal disruptions and downtime, and ensuring that services cater to the needs of commuter groups such as wheelchair users and families with young children.
