Singapore’s second-largest taxi company, Trans-cab, has announced on Wednesday (28 December) that it will cut its rental rate for cabbies who operate alone and apply to both new and existing drivers starting from 1 January 2017.
This move was taken in the middle of the growing competition from private-hire services Uber and Grab to attract more drivers.
The company said that for Renault Latitude over three years old cab, renters will have to pay S$88.50 a day, down from the present starting rate of between S$114 and S$125.
Those who wish to rent Toyota Wish taxis will have to pay $59.50, down from $90 currently, a 34 per cent reduction.
While, rent for the company’s Chevrolet models will be cut to between S$66 and S$72, down from the present rate of between S$94 and S$101.
Currently, the firm owns a fleet of about 4,500 taxis. It said that about 4,000 are currently on the road, which means that around 11 per cent of them are idle.
Jasmine Tan, Trans-cab general manager, said that taxi drivers have told the company that third-party booking apps Uber and Grab have taken their toll on the drivers’ earnings, saying, “It has affected their income and overhead cost.”
“That’s why we decided to reduce the rental to help the one-man operation drivers, to help them lighten their burden,” she added.
Ms Tan also told The Straits Times that 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. However, this will be cut to $140 with the lower rental programme.
Even with the reduced incentives, she said that because of the reduced rental fees, cabbies’ overheads will be lower by between $500 and $650.
Trans-cab also said it was also the right time to move as the Land Transport Authority (LTA) has recently announced that it will be simplifying the TA framework from 1 January 2017.
LTA stated that the “Percentage of Taxis with Minimum Daily Mileage of 250km” requirement and the shoulder peak periods requirement in the “Percentage of Taxis on the Roads during Peak Periods” indicator, will be removed.
National Taxi Association executive adviser Ang Hin Kee said that the move is welcome.
“The lower rental will help alleviate the burden on taxi drivers and mitigate the fall in passenger numbers, especially during the night,” he said.
Reports have said that commuters are switching from cabs. The cabs impose a 50 per cent midnight surcharge. Therefore, they move to private-hire cars, which do not impose such a levy.
National University of Singapore transport researcher Lee Der Horng was quoted to have said that the rental fee cuts are “rather substantial”. He thinks the company is doing this to “stop the bleeding”. “For the taxi industry, one unrented taxi requires about seven rented taxis to cover the cost,”
Channel NewsAsia wrote that it understands that SMRT also offered a limited promotion for its new taxi drivers. They received free rental for two weeks and a 50 per cent discount on rental for the next five and a half months. The promotion ended on 23 December.
Desmond, a taxi driver wrote, “A cut in rental prove that Transcab is responding to the market which private hires have made their impact on their low rental. With the same fares structure, it will aid the driver which work as OMO from driving 5hrs to 2.5-3hrs to cover their cost daily. In addition of the assistance of Grabtaxi, Comfort Delgro can no longer monopolize the call markets that they used to enjoy. To conclude, I welcome the move of lowering of rental.”
William Lim, another taxi driver has shared with TOC that drivers face a tough challenge to secure relief drivers nowadays, largely due to the private hire market where individuals can opt to drive under Uber and Grab instead of moonlighting as a relief driver. This new scheme to reduce the financial burden of the taxi driver will prove to be beneficial to those who are faced with such a situation.
Below is a form that is issued to interested applicants of the new scheme with the listed terms and conditions.