ComfortDelGro likely to peg cab fares to demand

It is likely that taxi commuters will soon have to pay fares which fluctuate according to demand.

Transport giant ComfortDelGro, which controls over 60 per cent of cabs here, has informed the Public Transport Council (PTC) that it plans to implement new fares for phone-booked rides.

“We can confirm that we have written in to the PTC,” said a ComfortDelGro spokesman, adding that the company was awaiting the council’s response. “We are unable to comment further until things are firmed up.”

The group, which operates the blue Comfort and yellow CityCab taxis, made its move right after rivals Trans-Cab and Premier Taxi informed the council of a similar plan.

The Straits Times understands that ComfortDelGro’s demand- pegged fares may not be exactly like the surge pricing mechanism popularised by ride-hailing firm Uber.

Instead of informing the commuter of how many times the fare would go up by, ComfortDelGro intends to simply flash a fare – say, $20 from Ang Mo Kio to Orchard on a Friday evening. If the customer rejects this flat fare, he can choose to go by the metered fare. But whether there will be cabs available for him then is uncertain.

ComfortDelGro had earlier said it wanted to introduce dynamic pricing for some time now, but it was “not allowed” to.

Taxi fares in Singapore have been deregulated since 1998, but the industry operates with an unspoken understanding that players will still need the blessing of the authorities before any revision can be made.

Observers expect the new fares to be rolled out by ComfortDelGro. and also expect the two remaining taxi players – SMRT and Prime – to follow suit.

Experts have commented that surge pricing is an efficient mechanism to match supply to demand, but raised concerns about its lack of transparency. Others have also associated it with a form of auctioning, where the consumer willing to pay the highest fare gets a service.

National University of Singapore transport researcher Lee Der Horng said taxi operators need not go head-on with private-hire operators this way.

“Uber and Grab have plenty of venture capitalist funds to burn,” he said. “Are taxi companies willing to burn their reserves?”

Instead, Dr Lee said, taxi firms should dismantle some of the surcharges in place today.

“They are confusing to overseas visitors. Even locals don’t know all of them,” he said, adding that flagdown, time and distance portions of the fare can be adjusted.

He said taxi companies have long claimed that surcharges were to help taxi drivers, and to incentivise them to pick up fares.

“But today, with so much competition from private-hire firms, is there still a need to incentivise them this way?” he said.

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