ComfortDelGro to slash taxi rental in return for 15% of cabbies' fare takings

In another move to stave off rising competition, transport giant ComfortDelGro Corp will embark on a profit-sharing scheme with its cabbies. In its Fare Share Scheme, mentioned by Chief Executive Yang Ban Seng at the group's annual general meeting with shareholders on Friday (26 April), cabbies will be offered lower rental rates for their taxis. In return, taxi-drivers hand over 15% of their fare takings to the company.

The voluntary scheme will initially be made available to single hirers of Hyundai i40 cabs which are less than four years old. If hirers sign up, they will pay a daily rental of $68-$78 - down from around $105. They will then share 15% of their fares with the company. There is no minimum number of trips they must clock. Letters of offer will be going out to the first batch of more than 1,000 drivers on Friday afternoon. "If successful, we will look at extending this scheme to other drivers as well," Mr Yang said.

Asked for their views, cabbies said the scheme, while not unique, is workable. "It's similar to the Grab system," said Mr. Henry Tay, 48, who has been driving for 10 years, referring to the private-hire operator widely seen as one of ComfortDelGro's strongest rivals. They (Grab) offer low rentals, but for every trip, they take 20% of the fare." Mr. Tay said ComfortDelGro's scheme would be most attractive to older drivers 'who don't do so many trips per day'. Recently retired veteran cabby Tony Pang, 69, said, "Times are bad, so this is a necessary move."

At Friday's AGM, Mr. Yang also said ComfortDelGro might consider offering ride-sharing, where two or more commuters going in the same general direction share a taxi. This is similar to options offered by private-hire firms such as GrabShare.

Since private-hire operators arrived in 2013, the taxi industry has been shrinking. There are now around 20,000 cabs on the road, a figure down from about 28,000 at its peak. Taxi trips have also plunged to 650,000 a day, down from nearly one million. Taxi companies such as ComfortDelGro have taken the opportunity to right-size their fleets.

Mr. Yang said the group has scrapped diesel taxis registered four or five years ago with high certificate of entitlement prices. These are replaced with new petrol-electric hybrid taxis which are more fuel-efficient, and which do not attract a diesel tax. Its fleet, once almost exclusively diesel, now comprises 22% of hybrids.