Third-Party Taxi Booking Service Providers Bill

Third-party taxi booking services could encourage greater competition, innovation and service quality, and improve customer satisfaction. In regulating third-party taxi booking service providers, the Government should focus more on maximising benefits to consumers and taxi drivers, and less on protecting a particular business model or existing taxi operators.

Speech in Parliament on 11 May 2015

Taxi booking mobile app

Mdm Speaker,

This Bill introduces a framework to regulate third-party taxi booking service providers, which include taxi booking mobile applications.

In recent years, the near-ubiquity of smart phones in Singapore has facilitated the entry of several taxi booking mobile apps like Uber, GrabTaxi and Easy Taxi. Most of these apps allow passengers to book rides with any taxi driver, even independent limousine drivers, unlike the booking services run by taxi operators which are limited to a smaller pool of drivers. This can provide better matching of passenger demand with taxi supply.

Some of these apps allow passengers to track the cab driver’s location, contact the driver directly, rate their drivers and even share a cab with others who are travelling the same route. They help reduce transaction costs, while encouraging taxi drivers to maintain high levels of service.

They are a win-win for both passengers and taxi drivers. Passengers enjoy greater convenience booking cabs, and drivers have easier access to a wider pool of passengers. I understand some enterprising Singaporeans have started their own limousine companies and receive their bookings through these apps. A larger supply of drivers could help address the perennial problem of not enough taxis being available during peak hours or when there is a heavy downpour.

With these “disruptive” technologies, the dominant taxi operators have to up their game or risk losing drivers to rivals. Their drivers could decide to switch to other operators who charge cheaper taxi rentals, while still receiving enough bookings via mobile apps. This could put downward pressure on rentals charged by taxi operators, which will benefit cab drivers.

Third-party taxi booking services could encourage greater competition, innovation and service quality, and improve customer satisfaction. In regulating third-party taxi booking service providers, the Government should focus more on maximising benefits to consumers and taxi drivers, and less on protecting a particular business model or existing taxi operators.

I would like to seek clarification from the Minister on Clause 10(b), in which the regulator, in deciding whether to register an applicant, “must have regard” to the demand for third-party taxi booking services in Singapore. Does this mean that if supply of these booking services exceeds demand, as assessed by LTA (Land Transport Authority), the regulator may decide not issue a taxi booking service licence?

Can the Minister explain why the LTA needs to base its licensing decision on demand for third-party taxi booking services? Is it not the responsibility of potential entrants to assess the viability of their own business models? If the service being provided by the new entrant is more attractive, this will give consumers more choice and consumers will naturally gravitate to them, with weaker players fading out. I don’t think the Government needs to make this decision for consumers.

Overall, I am glad to see that this Bill does not go the way of several other cities that have implemented outright bans on drivers accepting bookings via certain ridesharing apps. It is not a free-for-all, where any private car driver can accept bookings via these apps. At the same time, the regulations require basic consumer protections to be in place, like requiring drivers to be properly insured, conducting background and health checks on drivers and prohibiting overcharging of passengers.

Madam, I support the Bill.

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