Trans-Cab driver A.L. Tan had placed a handwritten cardboard sign at his windscreen offering to waive the new peak hour surcharge, which is 35 per cent of the metered fare, compared to old rate of a $2 flat fee.

According to cabbies, since the fare increase last month, many passengers are avoiding taking cabs during the peak hours of 7am to 9.30am, and 5pm to 8pm.

Mr Tan's cab company has warned him that his marketing tactics run against Trans-Cab's company policy.

The Land Transport Authority (LTA) yesterday backed the taxi company.

'If these drivers advertise, there will be an increased tendency for them to solicit for customers based on lower fares advertised if no commuters board their taxis,' said the LTA spokesman.

On Sunday, The Sunday Times highlighted a few taxi drivers who had come up with their own ways to get more passengers after the recent fare hike.

Besides Mr Tan, another cabby was giving out discount cards with his business card with the hope of getting passengers to call him.

Another admitted to calling out from his cab to potential passengers at bus stops to offer them a ride without the peak hour surcharge.

According to LTA, cabbies caught calling out to passengers along the road are considered to be soliciting for passengers.

Under new stiffer penalties, cabbies can be fined $500, given 12 demerit points and have their licence suspended for four weeks for soliciting.

Taxi drivers are bound by Road Traffic rules on top of their company rules.

There is nothing in the company rules that prevents a cabby from giving a passenger a discount at the end of the journey if he so wishes. It only means he takes home less money after paying the cab company the fixed monthly rental, which ranges from $70 to $125.

According to ComfortDelgro's spokesman, Ms Tammy Tan, this is a 'private arrangement between a taxi driver and passenger'.

However, cab companies including ComfortDelgro, the largest taxi operator here with 23,000 taxis, draw the line at advertising such discounted fares.

Managing director Teo Kiang Ang of Union Energy - which owns Trans-Cab - said that while his company discourages drivers from giving discounts, it was difficult to enforce such a rule.

As to whether cabbies were resorting to such marketing tactics because their earnings had fallen after the fare hike, the LTA said it is monitoring the situation closely.

'Preliminary surveys conducted by Comfort Taxis of its drivers showed that their earnings have been better even though the number of taxi bookings has fallen,' said LTA.

According to Comfort, for the first week after the fare increase driver income, based on a sample of 1,500 meters, had risen by 10 per cent.

LTA added that waiting times for commuters have generally been reduced and commuters who need taxi service find it easier to get their taxis.

It also said that some time was needed for the new fare structure to stabilise and for commuters and drivers to adjust.

The Taxi Operators' Associations, which represents six taxi associations, said they were still monitoring the situation and also said it needed to give the new fare hikes some time before 'reaching any conclusions'.

mariaa@sph.com.sg