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To curb the private-hire car population, the Government intends to charge Uber and Grab for a licence to operate in Singapore.

13 Mar 2018 | Local News : Singapore

Private-hire car companies Grab and Uber
may be required to pay for a licence to operate in Singapore to control the population of such cars, say observers, similar to the arrangement in London. In the British capital, the transport authority announced last year that firms with fleets of more than 10,000 would have to pay £2.9 million ($5.3 million) for a five-year licence to operate there.

The rental car population more than doubled from 29,369 in 2015 to 68,083 last year
Second Minister for Transport Ng Chee Meng raised the prospect of a licensing scheme for private-hire car firms in Parliament last Wednesday during the Budget debate when he said the Government was reviewing regulations on the private-hire car sector.

This in the wake of the rental car population having more than doubled from 29,369 in 2015, to 68,083 last year. The growth has largely been driven by chauffeured private-hire cars, which number about 47,000 now.

The average daily traffic volume entering the Central Business District (CBD) last year was up about 1.9 percent from 298,400 the previous year, according to the Land Transport Authority figures. In 2015, the figure was 297,500.

"Statistically it's not that significant, but these could be the early signs," said National University of Singapore transport lecturer Lee Der Horng. In cities such as New York and San Francisco, studies have found services such as Uber contributed to congestion, as well as a decline in public transit ridership.

In Singapore, while public transport ridership continues to climb, it is at a slower pace. Last year, growth was only 0.7 percent, compared with 4.6 percent the previous year and the average five percent increase seen since 2005. Private-hire vehicles are a major reason for the slowdown, say observers.

Dr. Lee said a review of the private-hire car industry should consider the impact such cars have on congestion. He said imposing a fee based on the number of vehicles in an operator's fleet could help control the private-hire car population.

Uber tied up with Comfort to provide a new service called UberFlash in December
Such a system would also help ensure the market remains sustainable, said Singapore University of Social Sciences transport economist Walter Theseira.

But he added, "Private-hire operators have shown themselves to be quite willing to burn through money to maintain market share. It's not clear that charging them more will be very effective."

During the debate on the Transport Ministry's budget last week, Mr. Ng said the Government will work to ensure that the consolidation of the private-hire car and taxi sectors does not result in a single operator dominating the market.

Such a scenario would be to the detriment of commuters and drivers, he said. In December, ComfortDelGro and Uber announced a tie-up, which is currently being reviewed by the Competition Commission of Singapore.

Separately, there have been reports of Grab buying out Uber's South East Asian business, though this has been dismissed as 'speculation' by both firms. The authorities are sending 'strong signals' that a monopoly is undesirable, said Dr. Theseira.

But he said such an outcome may be inevitable, and may even serve consumers more efficiently. To ensure commuters and drivers are protected in a one-operator scenario, he said, "Regulations can be put into place to prevent a monopoly operator from abusing (its) position."
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