Non-constituency Member of Parliament (NCMP) Lina Chiam spoke about the third-party taxi booking services bill in Parliament yesterday to question Transport Ministry of the intent of the proposed bill.
She noted in her speech that the bill deviates from the concept of free market, where supply of services by companies are set by market demand. Under the proposed bill, LTA is to issue licenses to service providers and to impose penalities upon the licensee based on the term, “a taxi booking service that is safe, reliable and efficient.”
She said that LTA’s concern is the safety of passengers who use the taxi booking apps and not whether or not if the company is able to financially sustain itself through its operations or whether taxi booking services are “ reliable and efficient”. If the taxi-booking apps fail to be reliable and efficient, the users would choose not to use them and the company eventually will back out from the market.
Mrs Chiam also noted that the bill pre-qualifies licensees on conditions which it sets, and is unfair to the third party booking providers especially new start ups who wish to venture into the market.
She then made the assertion that the bill seems to have the intent to protect the interest of the taxi companies seems apparent because the taxi booking apps from the existing taxi companies are exempted from the act.
As a result, the services provided by the taxi companies do not have to comply with the conditions set out in the act, or meet the LTA’s criteria and is still able to operate in the event, the third party taxi booking services are given directions from LTA to stop their services to ensure availability of taxis on the street.
This bill seeks to control and provides regulatory framework to providers of technological companies that operate third party taxi booking apps services for journeys within or partly within Singapore in anticipation of the impact on the growing transport system in Singapore and ensure the safety of passengers who uses third party taxi booking services.
Third Party taxi booking services has become increasingly a popular choice for commuters these days as it offers an alternative taxi booking services which allows commuters to book taxis from all the different companies and facilitates a higher probability of booking a taxi.
The bill is a good initiative by the Ministry of Transportation to safeguard commuters safety and interest using third party taxi booking services for transportation needs .
A case of allegation of rape in India, Mumbai and several other overcharging cases in Singapore were some of the issues brought about through the use of the third party taxi booking services.
This bill also ensures 3rd party taxi booking services manages its pool of registered drivers well to provide a safe experience for passengers who choose to use their taxi booking service to provide basic customer support. which include feedbacks, lost and found services and to deter overcharging of passengers.
After this bill is passed in parliament, third – party taxi booking apps will soon have to follow a set of regulations.as outlined by the LTA.
I support the bill, However the bill has raised some issues which may be of concern.
To me, this bill deviates from the idea of the concept of free market, where supply of services by companies are set by market demand.
Under the proposed bill, LTA is to issue licenses to service providers and to impose penalities upon the licensee based on the term, “a taxi booking service that is safe, reliable and efficient.”
I bring up the point about Singapore being a free market because what LTA should be concern is the safety of passengers who use the taxi booking apps. It should not be concerned whether or not if the company is able to financially sustain itself through its operations or whether taxi booking services are “ reliable and efficient”.
Whether or not the services provided by the third-party taxi services are reliable and efficient should be left to users such as the taxi-drivers and passengers to decide. If the taxi-booking apps fail to be reliable and efficient, the users would choose not to use them and the company eventually will back out from the market.
Even so with the condition for safe needs to be clearly stated out in the bill of what LTA determines as being “safe”. It seems to be giving LTA an arbitary right to determine what is safe and not without clear terms of reference to the license applicants.
This bill seems to pre-qualify licensees on conditions which it sets, and is unfair to the third party booking providers to prove themselves in order to gain market support and service to app users especially new start ups who wish to venture into the market.
The bill also seems to be protecting the interest of existing taxi companies by the conditions set within the bill.
Under one of its terms and conditions for application of the license , the booking fees charged by third – party taxi booking services cannot exceed the booking fees charged by taxi companies which runs contrary to a free market system and could impede operations. Commuters can use their discretion on which taxi services they want to book and pay more if they think they can get better and more efficient services with that particular taxi company provider to secure a booking.
For this reason, I would recommend a capping booking fee of 10% more than the usual booking fee set for all companies.
The intent to protect the interest of the taxi companies seems apparent because the taxi booking apps from the taxi companies are exempted from the act.
Apart from the point that they are exempted from the conditions of providing a taxi-booking service that is “safe, reliable and efficient.”
When LTA decides to give directions to 3rd party operators when availability of taxi is an issue under the proposed bill, taxi booking services by companies such as comfortdelgro and SMRT are not affected and can still offer the booking service to passengers.
From the available information in the public domain, we know that, Comfortdelgro reported a 35.6 million booking jobs in 2014 and that SMRT said that 40% of its taxi booking is through mobile app.
A common feedback that the general public have with the bill is the possibility that LTA will state that taxi booking service cannot require commuters to specify their destinations before they can make bookings could impede operations and ruling out the possibility completely.
The term “picking and choosing passengers” is unfair to taxi drivers, commuters and the public
Before the emergence of third-party booking services, passengers found it hard to book taxis in Singapore despite the availability of free taxis driving around the island.
This is because the booking service provided by each company only extended to taxis under their own company and the methodology of assiging bookings to taxi drivers were inefficient as taxi drivers also are reluctant to pick up immediate bookings.
Taxi drivers get penalized if they refuse to ferry commuters to their destinations upon confirmation of booking by their taxi companies
While some taxi drivers “pick and choose passengers” for maximum revenue, many of the taxi drivers “pick and choose” because of the clash of schedule due to the location that the passengers would want to go to
The introduction of third party booking services and its success in matching taxi drivers to passengers spurred taxi companies to allow passengers to specify where their destination is so to improve the booking success rate of the taxi booking service that they provide.
To the passengers, it is not unfair to them if taxi drivers do not pick up their booking but unfair to them if the taxi drivers on the street refuses to ferry them to their destination and that is already addressed to in LTA’s regulations.
Although it is not apparent in the bill that third party taxi booking services would be required not to allow commuters to specify their destinations in their bookings, but LTA is empowered to do impose such a condition under clause 17 of the bill.
The bill has a huge gapping flaw in its writing to address the issues it sought out to do as it does not seem to address the issue of private taxi drivers, solely vetted by the company itself, working outside the regulatory main framework.
Taxi drivers especially those which provide limousine services have been complaining about the presence of limousine drivers facilities by the third-party taxi booking service. Private vehicle drivers
The wordings in the bill for “taxi”, describes a public service vehicle as defined in the Road Traffic Act and therefore seems to exclude third-party taxi bookings services which facilitates booking of private car drivers by passengers from the bill, and the necessity of being licensed by LTA.
Let us not forget that NTUC has close connections with Comfortdelgro and how SMRT is owned 54% by Temasek holdings.
Under section 12(1), There should be an independent body other than LTA to vet the required conditions and the issuing of the certificate of registration.
LTA can be overseeing the licensees focusing more on the safety impact of these Apps and its powers of enforcement to the granted licenses.
The penalty of up to 100,000 imposed on any providers who fail to comply with the conditions set by the LTA s a good deterrent to errant operators but on the flip side would also deter small start ups which might have issues dealing with administrative lapses that might be penalised.
Section 20(1)(b) under regulatory sanctions, the authority ( without compensation)under subsection 2 against a registered provider if the authority is satisfied that the registered provider has failed to provide a third party booking service that is safe, reliable and efficient , I would like to ask the minister how does LTA define a booking service that is safe, reliable and efficient.
This is will be very intimidating for someone who intends to register as a provider as LTA does not give clear definitions.
For the safety of drivers and passengers, I would suggest the recommendation to legislate technologies companies operating taxi booking Apps to compulsorily provide taxis with a strong, adjustable holder and handphone solely delegated for use on the Apps system only.
Will the third party booking apps be fazed by these new regulatory framework and stifle competition.
In conclusion, there are pros and cons to a free market and regulation-versus free market argument is one that has long been battled out and it’s up to the active players in the market to react in the best interest of drivers and passengers.
Could companies that has partake in the innovation from ground up face the biggest backlash arising from the new regulations that might have affected their lucrative taxi booking services and heavy investment outlay.