The Land Transport Authority's (LTA) decision is based on Smart's failure to meet the taxi Quality of Service (QoS) standards on several occasions and its inability to meet the minimum requirements for a TSOL renewal.

LTA says Smart has had multiple failures in its QoS performance over the past 30 months including consistently failing to meet the call booking cater rate standard, throughout the entire period. Call booking is an important part of the taxi QoS standards and are seen as an efficient way to match taxi supply with demand. Smart has also failed in other QoS standards such as accident rate and first inspection passing rate - important aspects as they affect the safety of commuters.

Smart also shrank its taxi fleet from 701 taxis in January 2012 to 268 taxis in June 2013, instead of increasing it to meet the minimum fleet size requirement of 800 taxis. It has also not equipped its taxi fleet with the capability to poll taxis within the vicinity of the caller, or with a centrally-controlled 'on-call' display sign.

Although LTA has on numerous occasions consulted Smart to discuss their QoS performance and to understand reasons for their non-compliance, LTA said there has been no notable improvement.

With one less taxi service provider, LTA's immediate priority is to minimise the impact on commuters and to work with Smart to help fulfill its obligations to its drivers. Even though Smart's fleet of taxis account for less than one percent of the total taxi fleet - LTA will facilitate the transfer of Smart's eligible taxi licences to other taxi companies.

The taxis taken over from Smart will not be counted towards the annual two percent cap on the growth of each taxi company's fleet. This is to ensure that the overall taxi fleet does not decline as a result of Smart's exit from the industry.