Singapore's second-largest taxi operator, TransCab, is slashing rental fees in a bid to get more cabbies to drive with the company and reduce costs for existing hirers. The move comes amid stiff competition from private-hire services Uber and Grab, which has led taxi drivers to give up the business or jump ship to rent cars and drive for the new players, observers said.
From 1st January, TransCab said it will cut the daily rental fee for its Toyota Wish taxis from $90 now. The new fee will start from $59.50, a 34 percent reduction. The rate for a Renault Latitude over three years old will be cut from $114 to $88.50, a 22 percent reduction.
The revised rates, however, will apply only to drivers who operate the cab alone, without a relief driver. TransCab General Manager Jasmine Tan told The Straits Times yesterday, "Because of the competition from Uber and Grab, the taxi drivers' incomes have been affected. It is also harder for them to find a relief driver... By reducing their rentals, they can earn more, in a sense."
Also, under the current scheme, cabbies can earn a monthly incentive of up to $405 for good performance and for paying their rental fees on time. But this will be cut to $140 with the lower rental programme. Even with the reduced incentives, Ms. Tan said that because of the reduced rental fees, cabbies' overheads will be lower by between $500 and $650. With the change, TransCab also hopes to hire out more cabs. It has a fleet of 4,500 taxis, but about 500 - or 11 percent of them - are idle.
National Taxi Association Executive Adviser Ang Hin Kee said TransCab's move is welcome, noting, "The lower rental will help alleviate the burden on taxi drivers and mitigate the fall in passenger numbers, especially during the night." Reports have said that commuters are switching from cabs, which impose a 50 percent midnight surcharge, to private-hire cars, which do not impose such a levy.
National University of Singapore transport researcher Lee Der Horng said TransCab's rental fee cuts are 'rather substantial'. He thinks the company is doing this to 'stop the bleeding', adding, "For the taxi industry, one unrented taxi requires about seven rented taxis to cover the cost." Dr. Lee said TransCab's move should put pressure on the other cab firms to do likewise. ComfortDelGro, SMRT and Prime, however, did not comment when asked.
Premier Taxis said it constantly reviews and adjusts its rates. As to what proportion of its 1,953 taxis were unhired, the firm said that it was 'in line with the competition'. Combined, the five firms operate more than 27,500 taxis here. Reports estimate there are around 25,000 private-hire cars, with rental firms offering cars for as low as $60.
Former cabby Sakrudin Jailani, 53, who drove a TransCab taxi for nine years and left the business two years ago, doubts he will take up the offer. Besides dealing with the competition, it is not easy to work without a relief driver, said the safety coordinator. "Even the Uber cars can have a relief driver," he said.
