Singapore to ‘tidy up’ private ride-hailing operators market, proposes licensing rules

The transport regulator is proposing to license all street-hail and ride-hail operators as they provide the same fundamental service as taxi operators, which are the transportation of commuters from point to point.

Grab Source: Bloomberg

In a move which will tidy up the private-hire car operators market, Singapore’s transport regulator has announced a proposal to license all street-hail and ride-hail operators.

Explaining the suggested proposal, the Land Transport Authority (LTA) said in a news release on Thursday they will license all street-hail and ride-hail operators as they provide the same fundamental service as taxi operators, which are the transportation of commuters from point to point.

Currently, taxi operators which provide primarily street hail services are licensed but operators which provide pure ride-hail services are not, LTA said. The regulations will also include companies that provide pre-booked chauffeured services.

The changing private-hire car operators market

Six years ago, when ride-hailing firms came on shore, local authorities had viewed them as merely tech companies and not transport providers. Fast forward till now, the private-hire car operators industry has seen a massive disruption, with taxi operators suffering weaker earnings and ride-hailing firms competitively fighting for the lion’s share in the market.

Transport giant ComfortDelGro has been posting weaker earnings as its taxi business continues to take a beating from private-hire players.

Last year, after months of heated competition, ride-hailing firm Uber exited the Singapore market by selling its Southeast Asia business to the region’s ride-hailing giant Grab.

In November, another ride-sharing player Go-Jek entered the Singapore market with a beta version wanting to have a go in competing for local market share. Go-Jek announced the extension on its services to the whole of Singapore in January.

Expected details on licensing changes

The change will be different from the existing regulatory framework, where ‘one set of regulations apply to taxi operators which provide both street-hail and ride-hail services, and there are no uniform regulations that apply to operators that purely provide ride-hail services,’ said LTA.

The new regulatory framework will replace the existing Taxi Service Operator Licence and Third Party Booking Registration Certificate.

The framework will also allow drivers to choose to drive for whomever they wish, LTA said, as it ‘includes prohibiting driver exclusivity arrangements for all parties in the market, such that operators will no longer be allowed to prevent their drivers from driving for other operators’.

Preliminary statistics from motor insurers have revealed an increase in road accident rates ever since private-hire firms came about.

LTA has been engaging with key industry stakeholders such as the National Taxi Association, National Private Hire Vehicles Association on the proposed regulatory changes.

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